Bitunix Analyst: Fed's Credit and Yen Intervention Heating Up in Sync, High Funding Costs Reshaping Global Asset Pricing

August 3rd. Last week, the global market showed significant differentiation, with technology leaders' earnings reports still proving that AI capital expenditure has not slowed down. Microsoft, Google, and Amazon led the semiconductor group's strong rebound. South Korea's semiconductor exports increased by nearly 180% year-on-year, and the KOSPI index hit a record single-day surge. This indicates that the market has not denied the long-term growth logic of AI but is instead reevaluating companies that truly have cash flow and profit capabilities. However, the factor truly leading global asset prices has gradually shifted from corporate fundamentals to the repricing of capital costs.

The Federal Reserve maintained interest rates in July, but three officials publicly advocated for rate hikes. In addition, Powell proposed reducing the frequency of FOMC meetings and continued to weaken forward guidance, forcing the market to interpret economic data with less information. This has caused long-term U.S. Treasury yields to rise rapidly. This reflects not the market's expectation of higher rates but rather the beginning of demands for a higher risk premium, reevaluating the Fed's policy credibility in controlling inflation. When the 30-year yield hits a multi-year high, high-valuation assets must withstand higher discount rate pressure, even if their fundamentals remain strong.

On the other hand, Japan and the United States have made a rare move to intervene in the yen, indicating another important change in the global capital market. Japan is no longer just defending its exchange rate but is also avoiding further depreciation of the yen to prevent a hit on the Japanese bond market, which could even transmit through the U.S. bond market to the global financial system. If Japan and the U.S. continue to intervene together, it will increase the pressure to close arbitrage trades, posing a new risk of global liquidity tightening. Therefore, the significance of this yen event lies not only in the exchange rate itself but also in the world's largest source of arbitrage funds beginning to face policy restrictions. It is worth noting that the situation in the Middle East remains full of conflicting signals. While there has been progress in U.S.-Iran negotiations, both Iran and Israel maintain hardline stances. The issue of opening the Strait of Hormuz has not been resolved, and the recent temporary oil price decline mostly reflects the market's reduction of risk premium rather than the geopolitical risk being eliminated. As long as there is uncertainty in the energy supply, the Fed will find it challenging to ignore the pressure from imported inflation.

This week, the market will welcome key data such as ISM, JOLTs, ADP, and non-farm payrolls, while earnings reports from companies such as Palantir, AMD, and SpaceX will also provide important validation of whether AI demand continues to expand. However, compared to whether companies continue to deliver outstanding results, the market is more concerned about whether high rates, high yields, and global liquidity tightening have begun to erode the valuation of risk assets. In the period ahead, what truly determines the market's direction is no longer just whether companies can grow but whether global funds are willing to continue paying higher capital costs for overvalued assets.