This Week's Market Watch: Not Just CPI, But Whether Global Capital Costs Will Be Revised Up Again

On July 13, BTC faced pressure again around 64,000, with short-term attention on whether it can stabilize above 63,000 USD. If buying power fails to regain dominance, further testing of the 60,000 USD level cannot be ruled out.

This week, the global market will encounter a series of significant events, including the U.S. June CPI, PPI, retail sales, Federal Reserve Chairman Kevin Warsh's first semi-annual monetary policy report to Congress, and earnings reports from heavyweight companies like JPMorgan, Goldman Sachs, TSMC, ASML, and Netflix. The market focus is no longer just on single economic data, but on whether these events can collectively validate the current environment of "high capital costs." Among them, the importance of Warsh's first congressional hearing is arguably on par with the CPI itself. The market will observe whether he continues his current low-profile approach and avoids providing forward guidance, as well as whether he hints at the recent rising expectations for interest rate hikes. Some officials within the Federal Reserve have already begun discussing the withdrawal of last year's rate cuts, and if the June CPI exceeds expectations again, it will further raise market expectations for future policy tightening.

On the other hand, the situation in the Middle East has deteriorated again. Iran has announced the closure of the Strait of Hormuz, while the U.S. military continues airstrikes on Iranian military facilities, expanding the scope of conflict to multiple Gulf countries. It is noteworthy that what truly affects global inflation is not just oil prices, but the ongoing destruction of global refining capacity due to war. The Russia-Ukraine conflict, damage to Middle Eastern refineries, and shipping risks in the Strait of Hormuz have kept global refined oil supplies tight. Even if oil prices fall, prices for gasoline, diesel, and other end-use energy may remain high, making energy inflation stickier than the market expects.

At the same time, another key theme comes from the AI capital race. Recently, tech giants like NVIDIA, Amazon, and SpaceX have been raising funds for AI infrastructure through large-scale bond issuance, but Wall Street is showing signs of absorption fatigue. The market is not worried about corporate credit, but rather that the future supply of hundreds of billions in new debt will continue to push up corporate financing costs. This means that while AI investment has not cooled down, the cost of capital is gradually becoming an important limiting factor for valuations in the next phase, indicating that global liquidity is facing dual competition from government bond issuance and corporate financing needs.

Additionally, Japan's Government Pension Investment Fund (GPIF) plans to increase its allocation to alternative assets, leading to a rebound in the yen, which also reflects that large global funds are still adjusting their asset allocation direction. If the dollar maintains high interest rates, Japanese funds return, and AI financing needs coexist, global risk assets will continue to face pressure from liquidity redistribution.

Overall, this week the market needs to answer not only whether U.S. inflation will rise again, but also whether global capital costs will continue to remain elevated. In the context of AI continuing to absorb large amounts of capital, uncertainties in the energy supply chain, and unclear Federal Reserve policy direction, risk assets will still be influenced by interest rates, liquidity, and corporate financing capabilities, which will also determine whether Bitcoin can challenge the 64,000 USD region again or continue to maintain a volatile consolidation pattern.

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