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The ruling coalition in Japan has lost control of the House of Councillors, leading to uncertainty that has strengthened the yen. Trump is testing the EU's &#34;bottom line,&#34; stating that any agreement reached with the EU must set the minimum tariff at 15% to 20%. Additionally, U.S. Treasury Secretary Janet Yellen hinted that a tariff agreement between the U.S. and Japan is still possible before August 1. The market remains optimistic about trade prospects. Trump has officially signed the &#34;Genius Act&#34; into law, and the yield on 10-year U.S. Treasury bonds has declined for three consecutive days. As the overall trade situation tends to ease, the University of Michigan's consumer confidence index for July rebounded for the second consecutive month, rising to 61.8, the highest since February, alleviating inflation concerns. It is expected that the market's focus will shift to the Federal Reserve's monetary policy.
The three major U.S. stock indices showed mixed results, with the Dow Jones down 0.32%; the S&amp;P 500 down 0.01%; and the Nasdaq up 0.05%. The China Golden Dragon Index rebounded by 0.6%, marking four consecutive weeks of gains. The total market capitalization of cryptocurrencies has surpassed $400 billion for the first time, with cryptocurrency stocks showing mixed performance: Robinhood rose 4.07%, Coinbase rose 2.2%, Circle fell 4.71%, and Hut 8 fell 2.26%. According to Bank of America citing EPFR Global data, cryptocurrency funds attracted $5.8 billion, the highest since November last year, while bond and gold funds attracted $15.7 billion and $1.3 billion, respectively.
The U.S. dollar index fell 0.16%, holding above 98.0; the euro/dollar rose 0.24%, recovering to 1.1600. The dollar/yen rose 0.16%, marking two consecutive days of increases; gold rose 0.32%, reported at $3,349.5; WTI crude oil fell 2.35%; Bitcoin remained flat, trading around $118,000; Ethereum rose 3.9%, reaching a new historical high of $3,768.
Macro News
Japan's ruling coalition loses control of the House of Councillors, Shigeru Ishiba's administration appears more vulnerable
According to a report by NHK, in the House of Councillors election held on Sunday, Japan's ruling coalition lost its majority, definitively losing control of the House of Councillors. This further undermines the ruling coalition and marks the first time since 1955 that the Liberal Democratic Party cannot control the House of Councillors. The report cites analysis indicating that the election results reflect public criticism of the government's policies in response to high prices.
With the deadline for tariff negotiations with the U.S. approaching, this outcome further weakens Prime Minister Shigeru Ishiba's governing power. Although this vote does not directly determine whether Ishiba's government will collapse, it brings him political pressure, as he already lost control of the more powerful House of Representatives last October. Additionally, the market generally believes that this event may mean the Liberal Democratic Party will have to implement policies such as tax cuts and increased issuance of government bonds, and the normalization process of the Bank of Japan's monetary policy may also be delayed.
Trump reportedly plans to impose tariffs of 15% to 20% on the EU
The British Financial Times quoted sources saying that Trump plans to set the tariff levels against the EU at least between 15% and 20%, which introduces variables into the trade negotiations between the US and the EU. According to reports, Trump ignored the EU's proposal to lower the 25% tariff on imported cars, leading to pessimism from the European Commission's Trade and Economic Security Commissioner, Valdis Dombrovskis, regarding the negotiation prospects. Previously, the EU had generally accepted the US's proposed basic tariff level of 10%. Trump had earlier stated that if the US and EU could not reach an agreement by August 1, the EU would have to pay a 30% tariff.
German Chancellor Merz stated that the tariff negotiations between the EU and the US have entered the final stage, with both sides still discussing whether to adopt differentiated policies for specific industries. He supports the efforts made by the European Commission to reach an agreement, emphasizing that the lower the tariffs, the more beneficial it is for both sides, as tariffs ultimately harm everyone.
Improvement in inflation expectations leads to a rise in US consumer confidence to a 5-month high
As expectations for the economy and inflation continue to improve, the US consumer confidence index rose to a 5-month high in early July. Data released by the University of Michigan on Friday showed that the preliminary consumer confidence index for July increased from 60.7 a month ago to 61.8. However, this figure is still below last year's levels. Consumers expect an annual price increase of 4.4% over the next year, down from 5% last month, marking the lowest level since February of this year. They anticipate an annual inflation growth rate of 3.6% over the next 5 to 10 years, also the lowest level in 5 months.
Joanne Hsu, the head of the survey, stated in a statement that consumers' expectations regarding business conditions, the labor market, and even their own income are weaker than a year ago. However, the rise in confidence over the past two months indicates that consumers believe the worst-case scenario they anticipated in April and May has eased. Nevertheless, announcements of increased tariffs or rising inflation could dampen market sentiment.
Trump officially signs the GENIUS Act into law, cryptocurrency total market value first breaks $4 trillion new high
Trump officially signed the stablecoin regulation bill known as the GENIUS Act, marking the implementation phase of US stablecoin regulatory legislation. The White House's cryptocurrency and artificial intelligence affairs head, Sax, stated that the GENIUS Act will create demand for investment or holding US Treasury bonds. Additionally, Trump stated that he would not allow the dollar's exchange rate to decline, warning that if the dollar loses its status as a reserve currency, it would be akin to the US losing a war. The US will also never have a central bank digital currency (CBDC) issued by the Federal Reserve. Trump pointed out that for cryptocurrencies, the stablecoin bill is a large-scale validation and a revolution in the fintech sector. Cryptocurrencies are beneficial for both the dollar and the nation.
The US House of Representatives passed three important cryptocurrency bills through procedural votes, coupled with hopes that US retirement funds will be allowed to invest in cryptocurrencies, driving the total market value of cryptocurrencies to first break $4 trillion, setting a historical new high.
Goolsbee: Uncertainty over tariffs keeps the Federal Reserve on hold
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, stated that Trump's tariff measures are unclear and may lead the Federal Reserve to remain cautious for a longer period. Goolsbee mentioned that although inflation and economic data are good, Trump's claim of a significant increase in tariffs on August 1 has raised concerns at the Federal Reserve that inflation may not be a one-time event, which is enough to keep the Federal Reserve on hold until policies become clearer. Interest rate futures data show that traders expect the Federal Reserve to cut rates by 46 basis points by the end of this year. Goolsbee has a voting right on monetary policy at the Federal Open Market Committee (FOMC) this year.
U.S. Treasury Secretary Janet Yellen privately urged Trump not to dismiss Powell
Trump has repeatedly expressed dissatisfaction with Powell, but The Wall Street Journal cited sources saying that U.S. Treasury Secretary Yellen recently privately urged Trump not to dismiss Powell. Yellen believes that the economy is performing well, the market is responding positively to the president's policies, and Federal Reserve officials have signaled that they may cut rates twice before the end of the year. If he were to fire Powell before the end of his term, it could have economic, political, and legal consequences, as Powell might file a lawsuit, which could drag into next spring, coinciding with the end of Powell's term.
Market Overview
U.S. Stocks: The three major U.S. stock indexes were mixed, with the Dow Jones down 0.32%, the S&amp;P 500 down 0.01%, and the Nasdaq up 0.05%.
European Stocks: European stock markets generally rose, with the German DAX 30 index down 0.33%. The French CAC 40 index rose 0.01%. The UK FTSE 100 index rose 0.22%.
Bond Market: The yield on the U.S. 10-year benchmark Treasury bond is about 4.42%, down 3 basis points from the previous trading day.
Commodities: Gold rose 0.32% to $3,349.5 per ounce. WTI crude oil fell 2.35% to $66.0 per barrel.
Foreign Exchange: The U.S. dollar index fell 0.16% to 98.46. The USD/JPY rose 0.16%, and the EUR/USD rose 0.24%.
Cryptocurrency: Bitcoin rose 0.56% in the last 24 hours, currently priced at $118,580. Ethereum rose 4.86% in the last 24 hours, currently priced at $3,770.
Hong Kong Stocks: The Hang Seng Index night market futures closed at 24,883 points, up 28 points, compared to yesterday's Hang Seng Index closing of 24,825 points, with a premium of 57 points and a turnover of 17,895 contracts. The night market futures for the National Index closed at 9,019 points, with a premium of 33 points compared to yesterday's National Index closing.
Global Company News
Cryptocurrency exchange operator Bullish applies for U.S. IPO
Cryptocurrency exchange operator Bullish has applied for a U.S. IPO. The company reported a net loss of $1.52 per share in the first quarter of the 2025 fiscal year, compared to earnings per share (EPS) of $0.45 in the same period last year. The average daily trading volume (ADV) of Bitcoin in the first quarter of 2025 was $1.21 billion, compared to $880 million in the same period last year. Adjusted revenue for the first quarter of 2025 was $62 million, compared to $53 million in the same period last year. Adjusted EBITDA for the first quarter of 2025 was $13 million, compared to $14 million in the same period last year
Adjusted net profit for Q1 2025 is $2 million, compared to $4 million in the same period last year.
American Express's Q2 profit rises 17%, beating expectations
Global payment system operator American Express announced that for the second quarter ending June 30, adjusted earnings per share reached $4.08, a year-on-year increase of 17%, compared to the expected $3.87; revenue reported at $17.86 billion, a year-on-year growth of 9%, against an expectation of $17.7 billion. The company stated that transaction volumes processed last quarter reached $416.3 billion, a year-on-year increase of 7%. The credit loss provision ratio was 2%, down from 2.1% in the same period last year; the provision amount increased from $2 billion to $2.1 billion.
Meta refuses to sign EU AI Code of Conduct
Meta, the parent company of Facebook and Instagram, stated that it will not sign the EU's AI Code of Conduct, arguing that the rules represent excessive regulation of AI development. The EU passed the AI Act last year and announced the final version of the AI Code of Conduct last week, which requires tech companies to voluntarily sign to help them comply with the new legislation, ensuring that AI technology is highly transparent and secure. The regulations will officially take effect next month. In addition to Meta's objections to the rules, Dutch semiconductor equipment manufacturer ASML and European aircraft manufacturer Airbus had also previously urged the EU to postpone the effective date of the rules by two years.
Today's news preview
China's one-year loan market quoted interest rate as of July 21
U.S. Conference Board Leading Economic Index month-on-month for June

The ruling coalition in Japan lost control in the Senate elections, leading to a strengthening of the yen. Negotiations on the trade agreement between Trump and the EU are still ongoing, with the U.S. Treasury Secretary hinting that an agreement may be reached. The U.S. consumer confidence index has rebounded, and the market holds an optimistic outlook on trade prospects. The total market capitalization of the cryptocurrency market has surpassed $4 trillion, with Ethereum rising over 4%. The dollar index has slightly declined, while gold and oil prices are fluctuating

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July 21 Financial Breakfast: Japan's ruling coalition loses control of the House of Councillors, yen strengthens, gold faces resistance at 3360, Ethereum surges over 4%