1 — CPI: Services & “Food-at-Home” Dominate
Headline CPI: 2.7 % Y/Y in June (up from 2.4 % in May). Shelter cooled, but:
- Medical-care services rose 0.6 % M/M; now 3.4 % Y/Y.
- Food-at-home gained 0.3 % M/M; 2.4 % Y/Y.
Implication: Services inflation has re-emerged, making a near-term Fed cut unlikely.
2 — Long Bonds Under Pressure
The 30-year yield closed back above 5 % for only the second time in 2025. Foreign demand at recent long-bond auctions has thinned, and duration-hedging activity is rising.
Implication: Higher term-premia tighten financial conditions exactly when Treasury supply is increasing.
3 — Low-Vol Regime, Silent Rotation
- VIX hovers in the mid-teens.
- Small-caps and prior laggards led yesterday while Biotech cooled.
Investors appear to be rotating within equities rather than de-risking.
4 — EUR/USD: The Risk-On Barometer
The euro fell to $1.1602 (-0.5 %), its lowest in six weeks, right after the CPI print and bond sell-off. A stronger dollar confirms foreign capital is favoring U.S. stocks over Treasuries.
5 — ETF Volume Snapshot
| ETF | 15 Jul 25 Volume | 14 Jul 25 Volume | Δ % |
|---|---|---|---|
| QQQ (Nasdaq-100) | 42.86 M | 36.45 M | +17 % |
| IWM / RTY (Russell-2000) | 44.15 M | 24.63 M | +79 % |
Putting It All Together
- No near-term rate cut: services-led inflation keeps the Fed sidelined.
- Term-premium repricing: long-bond buyers demand more yield.
- Equity bid persists: global capital prefers U.S. stocks; the stronger dollar says so.
- Rotation, not retreat: cyclicals and small-caps gain while volatility stays muted.
Watch-list: Friday’s 20-year auction coverage & indirect bid, next week’s flash PMIs for services-price components, and daily EUR/USD closes below 1.16.