According to BlockBeats, a Bitunix analyst said on Aug. 10 that global assets are again facing the constraint of high funding costs after weaker U.S. labor data and policy signals out of Japan.
U.S. nonfarm payrolls fell by 23,000 in July, an unexpected decline and the first negative reading since February this year. Although the unemployment rate dropped to 4.1%, payroll data for May and June were sharply revised lower in aggregate, suggesting that resilience in the U.S. labor market is weakening.
That has made the Federal Reserve’s policy trade-off between inflation and employment more complicated. The analyst said that, with divisions among officials over rate hikes widening recently, the risk premium tied to monetary policy is still likely to show up in U.S. Treasury yields and the valuation of dollar-denominated assets.
Japan’s policy shift and FX intervention draw attention
The summary of opinions from the Bank of Japan’s July meeting carried a stronger signal toward further rate hikes. Some board members said policy normalization should be handled in a more flexible, and even more proactive, way.
The analyst said yen weakness prompted a rare joint currency intervention by Japan and the United States. In that view, the exchange-rate issue is no longer just a question of Japan’s own monetary policy. It is increasingly tied to U.S. Treasury holdings, dollar liquidity, and the structure of global carry trades.
If expectations for further Japanese rate hikes continue to build, the cost of yen-funded carry trades could rise as well, potentially increasing volatility in richly valued and highly leveraged assets.
Long-end Treasury pressure remains centered on inflation and policy
U.S. Treasuries are at another key point. The analyst said recent moves by Bessent — backing yen intervention, discussing the FIMA liquidity tool, and adjusting language around long-term Treasury issuance — all point in essence to efforts to ease pressure in the long-end Treasury market.
Still, support from the Treasury Department is limited while fiscal deficits, inflation, and energy costs remain elevated. In the analyst’s view, the main drivers of long-term yields remain the inflation path, Federal Reserve policy, and how the market prices U.S. fiscal sustainability.
AI demand stays strong, but expectations are even higher
The industry picture looks very different. Demand for SpaceX, AI servers, HBM, and NAND remains strong, and corporate capital expenditure is still expanding. But shares of Sandisk and Western Digital fell sharply after earnings, showing that the issue is no longer simply whether earnings are growing. The market is now testing whether companies can keep outperforming already very high expectations.
The analyst said the central tension in the AI sector is continuing to shift toward capital efficiency and how much valuation the market can still absorb.
U.S. July CPI becomes the key test this week
For markets, the bigger question this week is not one single data point. It is whether cooling employment can offset the pressure that inflation and fiscal factors are placing on long-term interest rates, and whether heavy AI-related capital spending can continue to turn into cash flow strong enough to support high valuations.
Wednesday’s U.S. July CPI report will serve as an important check. If inflation remains sticky, weak payrolls may not be enough to create lasting room for lower rates. If inflation and employment cool at the same time, pressure from high rates on global risk assets may have a better chance of easing in a more meaningful way.
Overall, the analyst said global assets are still operating in an environment marked by high fiscal demand, high capital spending, and high funding costs at the same time, with volatility and cross-asset divergence likely to stay elevated.