Wintermute Weekly Report: CPI fell beyond expectations and the situation in Iran heated up, and BTC bucked the trend and closed up as the strongest risky asset of the week

In comparison, according to Wintermute OTC trader @Jjay_dm, the CPI fell 0.4% month-on-month in June, the biggest monthly decline since April 2020. Overall inflation fell from 4.2% to 3.5%. The market immediately priced the July FOMC as standing still, and the probability of a September rate hike also dropped from over 75% to 63%. However, the US reinstated its naval blockade of Iranian ports and carried out air raids for the fourth night in a row. Brent crude oil soared 15.54% in a single week, hitting a maximum of 87 US dollars/barrel. The upward pressure on energy inflation is already building up, making the sustainability of this CPI decline questionable.

Meanwhile, China's Moonshot released the open source model Kimi K3, claiming that the performance is comparable to the cutting-edge models of OpenAI and Anthropic, directly impacting the AI computing power narrative. TSMC fell 7% in a single day, the Philadelphia Semiconductor Index hit the worst weekly performance in 15 months, NASDAQ fell 4.16%, and Nvidia once gave up the world's top market capitalization position to Apple. The crypto market bucked the trend and became the best performing risk asset of the week. Within minutes of the release of the CPI data, BTC pulled from around $62,000 to $64,900, and ETH jumped 7% to $1,884 in a single day. CoinGlass data showed that approximately $134 million of short positions were forcibly closed in the first hour.