SignalPlus Macro Analysis Special Edition: 15% Floor

15% —— This seems to become the "new Benchmark" tariff baseline in all future trade agreements of the United States. According to the latest announcement from the United States with Japan and the European Union last weekend, the EU now agrees to accept a general tariff rate of 15%, just like Japan, although there are still some unclear details regarding energy procurement and VAT arrangements. Overall, this agreement is expected to bring about $90 to $100 billion in additional tariff revenue to the United States and attract approximately $600 billion in new investment from the European continent. If everything is realized, it would be quite a nice report card for the governing authorities. At the same time, the United States has once again announced a 90-day extension of the tariff grace period on China. However, the market remains cautious about whether substantial breakthroughs can be achieved between the U.S. and China, especially in the context of the relatively harsh tariff conditions faced by the overall Asian region (excluding Japan). This issue is still developing.

On the other hand, the stock market continues to rise strongly, reaching new highs. This is mainly attributed to corporate profit performance being "just on target" compared to expectations (led by Alphabet), as well as a significant easing of relations between President Trump and Federal Reserve Chairman Powell. After a media-saturated visit to the Federal Reserve headquarters, Trump stated: "Firing Powell is unnecessary, the Federal Reserve will take the right actions" "Powell told me the economy is doing well" "Powell is a very good person"

As one of the most influential political uncertainties eased, the dollar rebounded, the yield curve flattened last week, and the stock indices in Europe and Japan rose due to the "acceptable" trade agreement reached with the United States. Meanwhile, stock market volatility continued to decline, showing one of the longest downward trends in history.

For short sellers, the situation is even less favorable as the momentum indicators are breaking upwards across the board, and the market shows good breadth. Both the benchmark index and the equal-weighted SPX index reached new highs last week. The 13-week and 26-week moving averages have formed a golden cross, while bond traders have significantly lowered their interest rate cut expectations in light of the heightened risk sentiment.

The macroeconomic and financial situation remains favorable, with the recent dovish turn of global central banks and the weakening of the US dollar, the growth of M2 money supply has quietly rebounded, providing positive support for financial assets and fixed assets (including commodities and cryptocurrency assets).

Returning to cryptocurrency, although Galaxy Digital reported that an investor from the "Satoshi era" realized profits amounting to 9 billion USD, the market barely fluctuated, with BTC stabilizing around 120,000 USD and ETH returning to the 4,000 USD mark. This wave of selling pressure from OGs was offset by record high inflows into spot ETFs, with cryptocurrency assets experiencing net inflows for 14 consecutive weeks, totaling 27 billion USD in net inflows year-to-date, and weekly net inflows reaching nearly 4.4 billion USD.

The ETF spot trading volume continues to reach new highs, with weekly transaction amounts approaching 40 billion USD, among which ETH stands out with an inflow of 2.1 billion USD, nearly doubling the previous record, and the cumulative inflow since the beginning of the year has reached 6.2 billion USD. Over the past three and a half months, the total asset size of ETH ETFs has increased by nearly 25%.

ETF inflows are still almost entirely dominated by the United States, accounting for over 97% of the total weekly inflows. The narrative adopted by mainstream institutions remains hot, with Goldman Sachs and Bank of New York Mellon announcing a partnership to use Goldman Sachs' "GS DAP" platform to handle part of the tokenized BNY fund. While this move is a positive development for the industry as a whole, it is more noteworthy to mention a line from the official statement: BNY will continue to "maintain the fund's official books, records, and settlements in accordance with the currently approved guidelines." -- Bloomberg In other words, the final legal and operational decision-making power is still held by the existing "paper-based system," which is not entirely consistent with the future envisioned by DeFi / on-chain native users, but this is probably the price that must be paid for mainstream adoption. Looking ahead, the current market does seem to be somewhat overheated (but which asset class isn't?), Bloomberg points out that an increasing portion of the current BTC rally is coming from expectations of "monetary policy," specifically a dovish liquidity outlook. We don't have a particularly strong opinion on this breakdown, but it is worth noting that the recent gold price has appeared relatively weak after multiple failed attempts to rise. If it falls back to the $3000 - $3200 range in the short term, it may have a certain drag on BTC.

That said, going with the flow is still the way to go (please do your own research DYOR), and we still advise avoiding counter-trend operations. Keep the faith and enjoy this summer until new signals arrive. Wishing everyone good luck and successful trading!