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SignalPlus Macro Research Report: US inflation slows down, CPI has a chance to further soften.

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Mainstream digital asset investment products received a capital inflow of $136 million, marking the third consecutive week of growth and helping to recover from the outflows of the previous two months.

Original Title: "SignalPlus Macro Research Report (20230711)"

Original Source: SignalPlus Chinese

Contrary to the trend of rising inflation around the world, China's CPI remained stable in June, and PPI fell further into negative territory. The early signs of deflation, coupled with continued economic weakness, have intensified market expectations for immediate economic stimulus measures, pushing the USD/CNY exchange rate to its highest level since October, contrary to the trend of the USD weakening against most major currencies.

In the United States, inflation data is also relatively friendly, with Cleveland Fed's 10-year inflation expectations falling at one of the fastest rates in history (the fourth largest quarterly decline since 1980), and used car prices falling 10.3% year-on-year in June, reaching the lowest level since mid-2021.

These data will help lower market expectations for Wednesday's CPI data, and the current market consensus is that core CPI will rise 0.3% month-on-month and 5% year-on-year. Some institutions (such as Goldman Sachs) estimate that due to the significant decline in car prices and housing inflation, core month-on-month growth will further decline to 0.2%.

Favorable data background helped the global fixed income market rebound slightly after the recent sell-off, with the 5-year Treasury yield falling 11 basis points that day, and also helped the stock market rise slightly after the weak opening, in addition, summer trading was relatively calm.

In terms of cryptocurrency, mainstream digital asset investment products received a capital inflow of 136 million US dollars, which has grown for three consecutive weeks and helps to recover the outflow of funds from the previous two months; BTC is still the preferred choice for investors, accounting for 67% of the dominant position, and the inflow of funds is still mainly through Greyscale. Although the balance of stablecoins continues to decline and the recent NFT activity volume/floor price has further declined, the cryptocurrency price is still relatively stable. As we enter the summer, we expect the price to continue to fluctuate within a range, and the implied volatility will remain low.