7/13 Weekly Macro Note: Asset Price Bonanza Continues - Metals, Crypto, Equities, and More... But Yields to Have a Final Say & Trump Admin Lays into Fed

In this Weekly Macro Note we cover the busier week ahead on the data and earnings front, talking about new and continuing risks that exist for markets that have priced in perfection. More Wednesday...

Good Sunday evening MacroEdge Readers and Community,

As we head into the second half of July, we’re approaching another tariff and trade “deadline” whose actual significance remains to be seen. With renewed tariff announcements over the weekend—as we anticipated in last Sunday’s Weekly Macro Note—it’s increasingly clear the Administration is using tariffs as a multi-purpose tool, particularly in attempts to influence the bond market, though those efforts have proven futile thus far.

In Japan, long-end yields continue to blow out, and in the United States, the 30-year is back at the 5% level, on the verge of breaking cycle highs. Pair that with super-beta speculative assets like Bitcoin setting new all-time highs—rallying impressively again from the March lows—alongside a broader move in the so-called "inflation-trade basket."

Given this Administration’s hypersensitivity to asset volatility—especially in equities—it’s likely we’ll continue to see a barrage of interventions, announcements, and strategic pauses in the near term. At this point, it's nearly certain we’ll see no policy move from the Fed this month, which aligns with the fact that financial conditions are now the loosest they’ve been since the post-pandemic free money era. And while we remain firmly in the “money era” in terms of relentless fiscal expansion, there are other dimensions to assess true financial conditions—one of the most important being the level of speculation in financial markets, which is now back at all-time highs.

Important Macro Events & Dates This Week:

• CPI Inflation Report (Wednesday, July 16th): This remains critical for the Fed narrative—especially with speculative fervor in the market at elevated levels. Keep an eye on core inflation metrics.

• Retail Sales & Consumer Sentiment (Friday, July 18th): With consumer resilience increasingly questionable, these readings offer a health-check as stimulus tailwinds fade.

• Housing Starts Data (Thursday, July 17th): An important gauge amid elevated mortgage rates and tight inventory.

Earnings Season Kicking Off: Banks lead the charge this week, JPMorgan, Wells Fargo, and Citigroup report on Friday, July 18th. Watch closely for signals around credit conditions, deposit dynamics, and consumer credit quality. These reports will set the tone.

10Y and Reflation Trade - Back into the Macro Risk Drivers Seat

The elevated 10Y—which this Administration particularly dislikes—and the reflation trade are back at the top of the equity risk matrix. With Bitcoin at all-time highs and other signs of speculation still sitting at extreme levels, the risk/reward setup for equities is becoming even more complex. There’s growing career risk for fund managers who remain underexposed, and with the Administration’s fierce defense of U.S. markets and equity prices, the picture remains anything but straightforward.

As the “mini macro cycles” continue to unfold—just as we saw last summer—we’re watching for the next regime shift that could spark a fresh wave of volatility. Two clear signals remain: the 10Y and the reflation trade, both now showing up in metals, modest fuel price movements, rising raw material input costs, and more.

Beyond this, Japan has re-emerged as a risk of sufficient scale to impact both U.S. and global equity markets. The fact that enriching oneself has become the singular policy objective of politicians—at the expense of long-term prosperity—remains absolutely mind-boggling.

There remains extensive opportunity, and we’ll go over much more in the Midweek Macro Note as data is released and in the first AlphaSights report for July, which will come available at the end of the month. Given the lack of data and earnings last week - and continuation of the same speculative regime - there have been no abrupt shifts or data adjustments to note during this period of time. That’s not to say that that cannot, and might, shift on a dime.