This is my Quant
Trad-Fi Market Summary
U.S. and Significant Global Events (Week of August 4, 2025)
MONDAY, AUGUST 4
U.S. Factory Orders (June 2025)
Consensus Projection: Expected at ~-4.9% MoM, signaling a potential pullback in manufacturing demand.
Notes: Released at 10:00 AM EDT. Tracks new orders for durable and non-durable goods, influencing industrial production forecasts and equity sentiment in manufacturing sectors.
China Caixin Services PMI (July 2025)
Consensus Projection: Expected at ~51, indicating modest expansion.
Notes: Released at 9:45 PM EDT (9:45 AM CST). Gauges activity in the services sector, with implications for domestic demand and global supply chain views.
China Caixin Composite PMI (July 2025)
Consensus Projection: Expected at ~50.9, near the expansion threshold.
Notes: Released at 9:45 PM EDT (9:45 AM CST). Combines manufacturing and services activity, affecting CNY and commodity markets.
Japan S&P Global Services PMI Final (July 2025)
Consensus Projection: Expected at ~53.5, showing solid growth.
Notes: Released at 8:30 PM EDT (9:30 AM JST). Final reading of services sector activity, influencing BOJ policy expectations and JPY.
TUESDAY, AUGUST 5
U.S. Balance of Trade (June 2025)
Consensus Projection: Expected at ~-$61.4 billion deficit, reflecting ongoing trade imbalances.
Notes: Released at 8:30 AM EDT. Measures exports minus imports, impacting GDP calculations, USD strength, and tariff policy discussions.
U.S. ISM Services PMI (July 2025)
Consensus Projection: Expected at ~51.1, suggesting slight expansion.
Notes: Released at 10:00 AM EDT. Key indicator of non-manufacturing activity, affecting broader economic momentum and Fed rate path bets.
U.S. S&P Global Services PMI Final (July 2025)
Consensus Projection: Expected at ~55.2, indicating robust growth.
Notes: Released at 9:45 AM EDT. Final reading of services sector trends, influencing service equities and inflation outlooks.
Canada Balance of Trade (June 2025)
Consensus Projection: Expected at ~C$-1.6 billion deficit, showing trade pressures.
Notes: Released at 8:30 AM EDT. Tracks export-import dynamics, with effects on CAD and Bank of Canada considerations.
Eurozone HCOB Services PMI Final (July 2025)
Consensus Projection: Expected at ~51.2, modest expansion.Notes: Released at 4:00 AM EDT (10:00 AM CET). Final gauge of services activity, impacting ECB views and EUR.
UK S&P Global Services PMI Final (July 2025)
Consensus Projection: Expected at ~51.2, slight growth.
Notes: Released at 4:30 AM EDT (9:30 AM BST). Final reading of services sector, influencing BOE rate expectations and GBP.
WEDNESDAY, AUGUST 6
Eurozone Retail Sales MoM (June 2025)
Consensus Projection: Expected at ~0.3%, indicating steady consumer spending.
Notes: Released at 5:00 AM EDT (11:00 AM CET). Measures household purchases, with ties to inflation and ECB policy.
THURSDAY, AUGUST 7
U.S. Initial Jobless Claims (Week Ending August 2, 2025)
Consensus Projection: Expected at ~221,000, signaling stable labor market.
Notes: Released at 8:30 AM EDT. Monitors unemployment filings, shaping Fed decisions and risk appetite.
U.S. Productivity (Q2 2025 preliminary)
Consensus Projection: Expected at ~1.9% annualized, reflecting efficiency gains.
Notes: Released at 8:30 AM EDT. Measures output per hour, influencing wage pressures and inflation narratives.
U.S. Unit Labor Costs (Q2 2025 preliminary)
Consensus Projection: Expected at ~1.3% annualized, moderate rise.
Notes: Released at 8:30 AM EDT. Tracks labor cost changes, with implications for corporate profits and Fed inflation targets.
FRIDAY, AUGUST 8
U.S. University of Michigan Consumer Sentiment (August 2025 preliminary)
Consensus Projection: Expected at ~61.8, showing cautious outlook.
Notes: Released at 10:00 AM EDT. Includes inflation expectations, affecting spending forecasts and policy views.
Recap of Prior Week’s Data Results:
U.S. Consumer Confidence (July 2025) Consensus Projection: Expected at ~95.2. Result: Reported at 97.2, better than forecast, supported by labor market resilience, boosting equities modestly.
U.S. GDP Growth Rate (Q2 2025 advance) Consensus Projection: Expected at ~2.3% annualized. Result: Reported at 3.0%, above expectations, driven by consumer spending and inventories, lifting growth forecasts and stocks.
U.S. Pending Home Sales (June 2025) Consensus Projection: Expected at ~0.2% MoM.Result: Reported at -0.8%, weaker than forecast, tied to high mortgage rates, pressuring housing-related assets.
U.S. Employment Cost Index (Q2 2025) Consensus Projection: Expected at ~0.8%.Result: Reported at 0.9%, slightly higher, reflecting wage pressures but in line with disinflation trends.
U.S. Personal Income (June 2025) Consensus Projection: Expected at ~0.2% MoM.Result: Reported at 0.3%, modestly above, aided by wage gains.
U.S. Personal Spending (June 2025) Consensus Projection: Expected at ~0.4% MoM.Result: Reported at 0.3%, slightly softer, but still positive for consumption outlook.
U.S. PCE Inflation Rate (June 2025) Consensus Projection: Expected at ~0.3% MoM / ~2.5% YoY, core PCE at ~0.3% MoM / ~2.7% YoY.Result: Reported at 0.3% MoM / 2.6% YoY, core at 0.3% MoM / 2.8% YoY, in line with estimates, supporting gradual Fed easing bets.
U.S. Chicago Business Barometer (PMI) (July 2025) Consensus Projection: Expected at ~41.7.Result: Reported at 47.1, stronger than forecast, signaling less contraction in regional activity.
U.S. Employment Report (July 2025) Consensus Projection: Expected at ~100,000 nonfarm payrolls.Result: Reported at 73,000, below consensus, raising slowdown concerns and boosting rate cut probabilities, pressuring stocks and USD.
U.S. Hourly Wages (July 2025) Consensus Projection: Expected at ~0.3% MoM / ~3.8% YoY.Result: Reported at 0.3% MoM / 3.9% YoY, in line with MoM but slightly hotter YoY, with mild inflation implications.
U.S. ISM Manufacturing PMI (July 2025) Consensus Projection: Expected at ~49.5.Result: Reported at 48.0, weaker than expected, highlighting ongoing factory contraction, weighing on industrial equities.
U.S. Construction Spending (June 2025)Consensus Projection: Expected at ~-0.1% MoM.Result: Reported at -0.4%, softer than anticipated, linked to residential weakness.
U.S. University of Michigan Consumer Sentiment (July 2025 final)Consensus Projection: Expected at ~61.8.Result: Reported at 61.7, nearly in line, with stable inflation expectations.
U.S. Unemployment Rate (July 2025) Consensus Projection: Expected at ~4.2%.Result: Reported at 4.2%, as forecast, indicating steady labor conditions.
U.S. Initial Jobless Claims (Week Ending July 26, 2025) Consensus Projection: Expected at ~222,000.Result: Reported at 218,000, better than expected, underscoring labor stability.
U.S. Job Openings (June 2025) Consensus Projection: Expected at ~7.5 million. Result: Reported at 7.4 million, slightly below consensus, indicating cooling but still elevated demand, with limited USD impact.
U.S. ADP Employment (July 2025) Consensus Projection: Expected at ~64,000. Result: Reported at 104,000, stronger than anticipated, highlighting private sector hiring strength ahead of official payrolls.
This brings us to the revisions from Erika McEntarfer: The BLS report, which beat consensus expectations at 106k net new jobs but printed at 73k. The main issue is that print came with downward revisions in the U.S. Employment Situation report, which is represented in the list by the U.S. Unemployment Rate (July 2025). This report included substantial downward revisions to prior months' nonfarm payroll data, totaling -258,000 for May and June combined. Outside of the pandemic lockdowns, that was the biggest downward revision in decades. While the U.S. Job Openings (June 2025) report from BLS also had a downward revision to the prior month's data (-57,000 for May), it was smaller in scale and not the primary focus of market discussions on revisions. The U.S. Initial Jobless Claims is issued by the Department of Labor (not BLS) and had a minor downward revision to the prior week (-4,000). The U.S. ADP Employment report is a private-sector release and did not feature revisions in its July data.
Liquidity Summary (Fed liquidity guide)
As projected here, U.S. domestic liquidity has come down last 2 weeks in a row, printing a NET WoW change of -$187B, bringing YoY to +$478B.
Reverse Repo Market (RRP):
The RRP rose from 170B on July 28 to a high of 214B on July 31 due to window dressing, before falling sharply by 117B to close at 97B on August 1. Likely to see the downward trend continue.
Treasury General Account (TGA):
The TGA balance climbed from 363B on July 28 to 498B on August 1, reflecting gains of 55B on July 29, 2B on July 30, and 78B on July 31, with no change on August 1. The TGA is projected to rebuild gradually to around $500-800 billion, driven by seasonal factors like corporate tax receipts.
The Summer Treasury Quarterly Funding Announcement (QRA) results are in. The QRA maintained a steady course of Yellenomics, introducing no significant changes to coupon issuance rates and presenting no major surprises in overall financing needs or borrowing estimates. Coupon auction sizes were held unchanged, including no adjustments to 10-year or 30-year Treasury note and bond auctions, with gross coupon issuance steady at $1.1 trillion for the quarter.
Based on the latest data from the Federal Reserve’s H.4.1, bank reserves declined by approximately 15 billion in the week ending July 30, with average reserve balances at $3.35 trillion for that week, down from the prior week. The Wednesday, July 30 level stood at $3.30 trillion.
Fed Balance Sheet (QE/QT):
The Fed's total assets (WALCL) decreased by 15B on July 30 to 6,643B and held steady through August 1. No end for QT announced at the FOMC, with Treasury QT continued -$5 billion/mo, MBS QT at -$35 billion/mo..
For a complete view of global liquidity, projections, and how we are positioning, see the Macro Timeline Update and join the chat for premium members.
Federal Reserve & Co.
The Federal Open Market Committee (FOMC) concluded its July 29-30 meeting by maintaining the federal funds rate in the 4.25%-4.50% target range, marking the fifth consecutive hold. Notably, this meeting made history as two Fed governors dissented, advocating for an immediate rate cut—the first such split in over 3 decades. Fed Chair Jerome Powell's post-meeting press conference struck a hawkish tone, emphasizing the need to "look through" potential inflation spikes from tariffs and offering no clear signal on a September cut, despite pressure from President Donald Trump.
Market expectations for a September 2025 rate cut have fluctuated dramatically in recent days, reflecting Powell's hawkish stance and subsequent data surprises. Prior to the FOMC meeting, fed funds futures implied about 65% odds of a cut. Powell's comments post-meeting, which downplayed immediate easing and hinted at potential rate stability or even hikes to counter tariff-induced inflation, caused odds to plummet to around 45%. This shift briefly tilted sentiment toward "no cut" territory, with some analysts questioning whether the Fed would act at all in 2025.
However, the release of the July jobs report on August 1 reversed this narrative sharply. The data showed stalled job growth, with significant downward revisions to prior months' figures from the Bureau of Labor Statistics (BLS), pushing unemployment higher and revealing a weakening labor market. (as pointed out by the dissenting members in their risks of holding rates outlook) Odds of a September cut surged to 80-90%, with markets now pricing in a stronger case for 3 cuts in 2025 to support employment.
In a surprise move, Federal Reserve Governor Adriana D. Kugler announced her resignation effective August 8, 2025, six months before her term's end. This creates an immediate vacancy on the Board of Governors, opening a key slot for President Trump to fill and potentially influencing future policy direction. Kugler's departure could accelerate discussions around Fed leadership, including Chair Powell's role, as her exit might allow for broader reshuffling.
USD VS Everyone Else
The Dollar Index: (DXY) closed at 98.68 on August 1, 2025, down approximately 0.46% from 99.14 the prior day and down 1.27% over the past five days, marking a multi-week low amid weak U.S. labor data and heightened expectations for a Federal Reserve rate cut. The index faced pressure from the July jobs report showing stalled growth and downward revisions, alongside Fed Governors Michelle Bowman and Christopher Waller's dissents for an immediate 25bps cut at the July 29-30 FOMC meeting, citing rising risks to employment and minimal inflation threats from tariffs. However, resilient oil inventory draws and ongoing trade truce extensions provided some support, though global tariff uncertainties and an 80% market-implied probability of a September rate cut capped any rebound.
U.S. Trade: On Tuesday, August 5, 2025, at 8:30 AM ET, the U.S. Bureau of Economic Analysis (BEA) and Census Bureau will publish the monthly International Trade in Goods and Services report for June. Forecasting has a notable narrowing of the deficit to $61.0 billion, compared to the previous month's $75.5 billion shortfall. Trump outlined sweeping new tariffs on July 28, targeting dozens of trade partners, including a 15% flat tariff on EU goods, averting escalation ahead of August 1 hikes. Beijing and Washington agreed to extend the China-U.S. tariff truce by another 90 days on July 30 amid talks on fentanyl and overcapacity issues, pausing additional duties through late October. This leaves Canada and Mexico as key pending deals, with Trump granting Mexico a 90-day reprieve on July 31 but threatening 30-50% tariffs if no agreement by August 1, potentially straining USMCA relations amid "unfair" practice concerns. U.S. tariffs appear to be stabilizing in the 15-25% range on average, which is about $3.5 trillion in annual goods imports, generating $500 to $650 billion in additional annual taxes.
CNY/USD: The Yuan weakened slightly, with USD/CNY at 7.2118 as of August 1, up marginally from 7.1997 the prior day. Volatility persisted amid U.S.-China tariff extensions, with PBOC emphasizing liquidity controls, though export pressures from sanctions weighed; support at 7.1800, resistance at 7.2500, influenced by trade truce and Asian demand.
JPY/USD: The Yen strengthened sharply, with USD/JPY at 147.27 as of August 1, down 2.35% daily amid unwinding carry trades and positive U.S.-Japan sentiment. BoJ hike speculation intensified with labor data; support at 145.00, resistance at 150.00, driven by tariff reductions and broader market volatility.
EUR/USD: The Euro gained modestly, with EUR/USD at 1.1416 as of August 1, up 0.05% annually but down week-on-week. ECB policy held amid inflation at target, supported by U.S.-EU deal avoiding higher tariffs; support at 1.1400, resistance at 1.1600, with DXY weakness key.
Emerging Markets (EMFX): EM currencies weakened amid dollar fluctuations and tariff-driven volatility, with most extending losses from carry trade unwinds. Asian FX dipped on trade rerouting concerns, while Latin American pairs lagged. Mexican Peso (MXN) at USD/MXN 18.87 amid tariff reprieve benefits; Brazilian Real (BRL) pressured by fiscal woes at 5.65; Turkish Lira (TRY) near 40.50 on inflation; South African Rand (ZAR) at 18.20, seeking tariff alternatives. Analysts highlight short-term pressures but note resilience risks from U.S. policy shifts.
Bitcoin Summary
Bitcoin has experienced a volatile start to August, trading around $113,000 after dipping below this level amid broader market risk-off sentiment. July marked a record month for institutional adoption, but early August has seen a reversal in some flows. This summary covers recent Bitcoin ETF flows, corporate Bitcoin treasury activities, MicroStrategy's (MSTR) Q2 2025 earnings call, and notable movements of Satoshi-era coins.
Bitcoin ETFs: saw robust inflows in July, totaling a record $12.8 billion, reflecting strong institutional demand during a market rally. However, August began with significant outflows, with U.S. spot Bitcoin ETFs recording their second-largest daily outflow of $812 million on August 1, led by funds like Fidelity's FBTC 0.00%↑ and ARK's ARBK 0.00%↑
Bitcoin Treasury Companies: Corporate adoption of Bitcoin as a treasury asset continues to accelerate, with 219 entities now holding over 3.6 million BTC (17.3% of total supply), valued at $411.9 billion. In July alone, companies announced plans for billions in BTC acquisitions, with 68,000 BTC added across treasuries. Jack Mallers' XXI became the third-largest Bitcoin treasury holder. Adam Back's BSTR holds 30,000 BTC, ranking fifth. Weekly announcements in late July included 8 new treasuries (20,368 BTC) and 24 companies adding 9,183 BTC.
MicroStrategy (MSTR) Earnings Call: MicroStrategy reported blockbuster Q2 2025 results on July 31. Financials: $14 billion operating income, $10 billion net income, and $32.60 diluted EPS—beating estimates by over 35,000% (vs. expected -$0.10). Revenue: $114.5 million (beat expectations). Holdings at 607,770 BTC (now over 628,000 post-call); 25% BTC yield YTD. Raised $3.9 billion via ATMs, with $57 billion capacity remaining. Leverage ratio at 16.5%, with room to 30%. Saylor’s remarks reinforced the ongoing execution of the 21/21 Plan to raise $42 billion by 2027 for Bitcoin purchases.
Outflows (OG Sell pressure): Several dormant wallets from Bitcoin's early days (2009-2011) were activated over the last 2 weeks, with a Satoshi-era whale selling 80,000 BTC (mined ~2011) for over $9 billion. A wallet dormant for 15.3 years moved $29.6 million BTC. Another sold 9,000 BTC for $1 billion in mid-July. An 11-year-dormant wallet transferred 80,000 BTC (~$9 billion). These moves highlight Bitcoin's liquidity—over $8 billion moved in one instance, barely impacting price. However, it also signals that price levels do exist for long-term holders to sell at. Holding from $1.00/coin to $70,000 per coin in 2021 to watch it go to $19,000 and back to $120,000 is absolutely insane diamond hands.
Bitcoin Daily
The overall chart structure remains a bull market correction after a parabolic rise, with the price testing support near the prior all-time high close (~$113,000). Broken trendlines and the "Broken Floor" level increase the risk of further downside, but the non-oversold RSI suggests the market isn't at a panic low yet, potentially allowing for a bounce off the 110k level and sideways action or a milder pullback.
RSI (Relative Strength Index): At 42.01, this indicates momentum has cooled from overbought levels (earlier peaks near 80-90) but hasn't reached oversold extremes. Historically, in Bitcoin's bull cycles, RSI readings in the 40-50 range during pullbacks have often preceded consolidations or modest bounces, rather than major reversals. However, if it drops below 40, it could accelerate downside momentum.
OBV (On Balance Volume): Still showing a sharp decline (current value around 1.7M-1.8M), confirming the sell-off was volume-driven, suggesting ongoing distribution. This remains a bearish signal until buying volume picks up.
2YR Repo Swap Spread: At 95.00 and trending lower, this continues to highlight potential liquidity tightening, which could weigh on risk assets like Bitcoin if macro conditions deteriorate.
57% probability Bitcoin makes a new all-time high (above ~$145,000): This assumes the correction stabilizes around current supports, with RSI holding above 40 and leading to a relief rally that reclaims the broken trendline, aligning with bull market resilience.
43% probability Bitcoin falls below $110,000: The drop below the 50 line is potentially allowing sellers to push toward the $94,000-$100,000 zone if volume remains bearish and macro pressures intensify.
Bitcoin LRC Chart
Well, the chart has done it again with the green flip marking a 22% price increase. Now that price is pulling back, we will need to watch for the next indication but I am still expecting X marks the spot ($130-150k) by end of year.
