Co-Mind Morning Pulse – July 16, 2025
Co-Mind Morning Pulse – July 16, 2025
1. Market Mood
The mood has shifted from quiet confidence to watchful recalibration. After the U.S. CPI’s modest upside surprise, UK inflation came in at 3.6%—hotter than expected and enough to derail market expectations of an imminent Bank of England cut. Global investors, already leaning into the idea of a broad central bank pivot, are now forced to reconsider: maybe the inflation fight isn’t over, and maybe policy relief is farther off than priced. Risk appetite hasn’t collapsed, but a subtle unease is creeping in. Beneath the surface, we’re seeing the slow return of stagflation whispers, curve steepening, and the reawakening of the rate path as a live variable—not a certainty.
2. Key Cross-Asset Moves
Equities
S&P 500: –0.4% | Nasdaq: +0.18% | Dow: –1%
MSCI World: –0.35% | Stoxx 600: –0.37% | Nikkei: +0.2%
Fixed Income
U.S. 10Y Yield: ↑ to 4.49% | 30Y Yield: >5% for first time since May
Curve steepened modestly on inflation repricing and debt supply concerns
Commodities
WTI Crude: –0.7% to ~$66.5 | Brent: –0.7% to ~$68.7
Gold: –0.46% to ~$3,328 | Softened on USD strength and profit taking
Currencies
Dollar Index (DXY): +0.5% | USD/JPY: ↑ to ¥148.8 (15-week high)
EUR/USD: –0.5% | GBP/USD: –0.3% | FX reacting to yield differentials
Crypto
Bitcoin: Pulled back ~3% to ~$116,556 after U.S. regulatory bill setback
Sentiment still frothy; retail and institutional flows remain elevated
3. The Real Driver
Tariff-driven inflation risk is re-entering the market’s bloodstream.
The June CPI uptick, broad-based and tariff-linked, confirmed what Fed officials feared: imported inflation is starting to bite. With Trump threatening 30% tariffs on Europe and Mexico from August 1, the market is now forced to price not just trade friction but its knock-on effects—higher prices, slower growth, and delayed Fed cuts. Yet this is occurring in a sentiment regime where fund managers are near-record bullish, cash levels are at multiyear lows, and tech is euphoric. The real driver isn’t inflation itself—it’s the widening gap between deteriorating macro mechanics and still-optimistic positioning. This creates fragility.
4. What We've Learned
Inflation isn’t dead: US CPI rose 0.3% MoM, and it’s not just oil—coffee, furniture, tariffs.
Fed patience, but not dovish: Logan and Collins reiterated a “wait and see” approach; markets still price a cut by September, but the Fed isn’t promising one.
UK CPI at 3.6% crushed expectations and likely knocks out hopes for an August BoE cut.
Tariffs are back: Trump’s 30% threat escalates EU/Mexico tensions—timing into August could be a volatility trigger.
Earnings reactions are brutal: JPM beat but fell; Wells Fargo warned and got punished – margins matter more than beats now.
The dollar rebound is real: After months of decline, USD surged on higher yields and macro divergence – exposing a crowded short-dollar trade.
Crypto still trades on narrative: Bitcoin pullback shows regulatory risk can puncture sentiment despite record highs.
Investor sentiment at extremes: BofA's cash indicator triggered a sell signal; contrarian warning lights blinking.
5. Final Thought
We’re entering a subtle yet critical transition phase—where the macro tape is souring faster than the positioning tape. Tariffs are a visible inflationary threat again, the Fed is signaling stasis not support, and Q2 earnings are now being judged on 2025 guidance, not backward-looking beats. Meanwhile, investor sentiment has drifted into overconfidence, crypto is breaking records, and equity vol is near record lows. The tension is obvious: either the macro heals to match sentiment, or positioning gets caught flat-footed. For now, markets are pricing in perfection with a smile—but the clock on that narrative is ticking.