Sensei's Morning Forecast: Crypto Week Ignites, EU Tariff Delay, ISO Upgrade Goes Live
Trade tensions intensify, crypto regulation heats up, Japan’s debt strains resurface, central banks clash over digital assets, and XRP gains momentum after Fedwire adopts ISO 20022 messaging standard.
🧠 One Big Thing
Bitcoin just posted its highest daily and weekly close in history, topping $122K as the U.S. launches “Crypto Week” and Fedwire’s ISO 20022 upgrade goes live — aligning the world’s financial plumbing with blockchain rails. But behind the euphoria, Japanese bond yields are erupting ahead of the July 20 election, threatening to unravel global carry trades. If Japan sneezes, the world could catch a cold.
💰 Money Move of the Day
When global bond yields spike, like in Japan today, it often signals rising stress in traditional markets. That’s when capital tends to move into assets seen as more resilient—like gold, Bitcoin, or U.S. money markets. These shifts aren’t just reactions—they're clues about where institutions feel safest. Tracking these flows can help everyday investors understand where risk is rising and where confidence is going.
📊 Market Snapshot
Cryptocurrencies:
Bitcoin (BTC): $122,086 (▲ +2.49%)
Ethereum (ETH): $3,072 (▲ +3.32%)
XRP: $2.98 (▲ +5.21%)
Equity Indices (Futures):
S&P 500 (SPX): 6,239 (▼ -0.20%)
NASDAQ 100: 22,874 (▼ -0.37%)
FTSE 100: 8,978 (▲ +0.38%)
Commodities & Bonds:
10-Year US Treasury Yield: 4.419% (▲ +0.05%)
Oil (WTI): $69.86 (▲ +0.98%)
Gold: $3,371 (▲ +0.49%)
🕒 Data as of UK (BST): 11:46 / US (EST): 06:46 / Asia (Tokyo): 19:46
✅ 5 Things to Know Today
🇪🇺 EU Delays Retaliation Against US Tariffs as Trump Threatens 30% Levy
The European Union has postponed its planned retaliatory tariffs against the United States until early August, following President Donald Trump's announcement that he would impose a 30% tariff on EU imports starting August 1 (Time, ENCA). European Commission President Ursula von der Leyen confirmed the extension of a 90-day suspension of countermeasures targeting €21 billion worth of US goods, originally set to expire Monday (Reuters, CNN, European Newsroom). EU trade ministers convened in Brussels to debate the bloc's response, with Trade Commissioner Maroš Šefčovič warning that a 30% tariff would "practically prohibit" EU-US trade (Euractiv). The EU has prepared a retaliation package targeting €72 billion in US goods, in addition to the suspended €21 billion list (AINvest, Irish Times, Macau Business).
Trump’s escalation from a previously threatened 20% to 30% tariff marks a hardening stance that could derail ongoing negotiations (NPR). With the EU-US trade relationship valued at €1.68 trillion annually—almost 30% of global trade in goods and services (CNBC)—EU officials are working to coordinate responses with allies like Canada and Japan (Bloomberg, Politico). Trump's existing tariffs already affect €370 billion in EU exports—70% of the bloc’s US-bound shipments (Euractiv). French President Emmanuel Macron urged the EU to accelerate "credible countermeasures," while German Chancellor Friedrich Merz warned the tariffs would severely damage German exports (China Daily, Macau Business).
Sensei’s Insight: A 30% tariff would strike at the heart of transatlantic trade. The EU’s decision to pause retaliation reflects a last-ditch effort to preserve talks, but the €72 billion retaliation plan is locked and loaded.
Trump’s Trade War: What’s Happened, What’s Next
As the August 1 tariff deadline approaches, here’s a complete briefing on how the Trump administration’s trade war has unfolded, what policies are currently in place, and what to expect in the coming weeks. This summary includes the tariff structure, concluded agreements, unresolved tensions, and economic fallout—all critical for understanding the stakes ahead.
Current Tariff Structure and Agreements Secured
Since “Liberation Day” on April 2, when President Trump imposed sweeping reciprocal tariffs of 20% to 40% on dozens of nations, the U.S. has built the following tariff framework and trade deals:
30% tariffs on most Chinese imports (Tax Foundation)
25% tariffs on Canadian and Mexican goods (with USMCA exemptions)
50% tariffs on steel and aluminum (Marketplace)
10% baseline tariff on nearly all other imports (White House)
Framework trade agreement with the UK (BBC)
Rare earth minerals pact with China reducing tariffs to 30% (World Economic Forum)
20% tariff arrangement finalized with Vietnam (Marketplace)
Nations Still at Risk of August 1 Tariff Escalation
Despite outreach and negotiations, the following countries have not reached agreements and are facing imminent tariff increases:
The European Union (under 30% tariff threat) (BBC)
Over 20 unnamed countries notified via formal warning letters that new rates will be imposed August 1 (White House)
Economic Impact and Investor Implications
The economic effects are mounting. Average U.S. tariff rates now stand at 18.0%—the highest since 1934—costing the average household $2,400 annually according to the Yale Budget Lab. Prices for shoes and apparel have surged by 39% and 37%, respectively. U.S.-China trade has dropped 28.5% year-over-year, with June tariff revenue alone exceeding $30 billion (Tax Foundation). While financial markets have reacted more mildly than during April's volatility, the August 1 deadline remains a critical moment. Only 42% of small-to-midsize CEOs plan to hire—marking the lowest expansion sentiment since 2003. Whether Trump escalates or backs off will be closely watched by investors and policymakers alike.
Sensei’s Insight: Trump’s trade war has shifted from chaos to policy. The August 1 deadline is a pressure point—if tariffs rise further, markets may snap out of their recent calm. For investors, this isn’t just trade noise—it’s a signal of deeper economic strategy ahead of 2026.
🏛️ U.S. Launches Crypto Week with Market Momentum Surging
The U.S. House of Representatives kicked off its first-ever “Crypto Week” (Investopedia) on July 14, 2025, just as Bitcoin surged to an all-time high of $123,000 (Cryptopolitan). This legislative blitz includes three major proposals: the GENIUS Act (Pillsbury Law) for stablecoin regulation, the Clarity Act (DLA Piper) for defining digital asset market structures, and the Anti-CBDC Surveillance State Act (House Financial Services) designed to prohibit central bank digital currencies. Lawmakers hope to create the regulatory clarity institutions have long demanded—just as digital assets explode into the financial mainstream.
Fueling the rally, Bitcoin ETFs (CoinCentral) posted their second-largest single-day inflow ever with $1.18 billion, led by BlackRock’s IBIT (BlackRock) fund, now holding over 700,000 BTC worth $83 billion. MicroStrategy (CoinDesk) and Metaplanet (CoinCentral) continue accumulating aggressively, with the former now owning 597,325 BTC worth $64 billion. Analysts attribute the $1.2 trillion crypto market surge since April to “crisis mode” inflows amid U.S. deficit fears and dollar weakness. With long-term holders showing resilience and activity below previous peaks, many see further upside in the current cycle.
Sensei’s Insight: As Capitol Hill debates crypto’s role in the financial system, Bitcoin’s record-setting price sends a loud message: digital assets are no longer fringe—they're foundational.
🏦 BOE Governor Bailey Warns Against Private Stablecoin Issuance
Bank of England Governor Andrew Bailey has issued a strong warning to banks against launching their own stablecoins, arguing they could threaten financial stability and undermine monetary sovereignty. In a Sunday Times interview, Bailey, now chair of the Financial Stability Board, said stablecoins might extract liquidity from traditional banking and limit credit availability, while creating systemic risk through the fire-sale of reserves during crises. Instead, he recommended tokenized deposits as a safer, regulated alternative that retains consumer protection within the banking system (Bloomberg, Cryptonomist, Mitrade).
Bailey’s stance presents a serious regulatory obstacle to the $255 billion stablecoin sector, which has more than doubled in size over the past two years (TradingView, BIS). His position contrasts sharply with the U.S., where the GENIUS Act is pushing for commercial bank-issued stablecoins (City A.M., Binance). EU policymakers are also voicing concerns over dollar-backed stablecoins threatening regional autonomy. For investors, the divergence signals heightened volatility and regulatory risk in stablecoin markets, alongside rising tension between private crypto innovation and traditional banking digitalization.
Sensei’s Insight: Bailey’s remarks mark a critical inflection point—regulators are drawing clear lines in the sand between sovereign monetary control and decentralized digital assets. Expect stricter scrutiny and a pivot toward state-backed digital instruments.
🇯🇵 Japanese Bonds Tumble as Fiscal Fears Spike Before Election
Japanese government bonds saw a sharp sell-off Monday as investors braced for potential fiscal expansion ahead of the July 20 Upper House election. The 10-year yield jumped 7 basis points to 1.57%—a high not seen since May 22—while the 30-year yield climbed to 3.115%, nearing its record 3.185% peak from May. The 40-year yield surged 17 basis points in afternoon trading, and the 20-year hit 2.57%, approaching October 2000 levels. The spike came as polls indicated Prime Minister Shigeru Ishiba’s ruling coalition could lose its Upper House majority, potentially boosting opposition parties advocating for tax cuts and increased spending. With Japan already devoting ¥28 trillion ($185 billion) or 25% of its budget to debt servicing, and a debt-to-GDP ratio at 250%—the highest in the developed world—the bond market is flashing red over the country’s fiscal outlook (TradingView, Reuters, Yahoo Finance).
Investor anxiety is mounting as rising JGB yields threaten the viability of yen-based carry trades. With higher domestic yields, Japanese investors—key buyers of U.S. Treasuries and tech stocks—may repatriate capital, unwinding global positions. This could narrow the Japan-U.S. yield spread, pressuring global asset markets and the yen. Complicating matters, the Bank of Japan’s slow policy normalization collides with political pressure for fiscal loosening, putting upward pressure on yields but limiting room for monetary tightening. The risk of a synchronized carry trade unwind, last seen in August 2024, is once again on the table (CNBC, Capital Group, InvestTalk).
Sensei’s Insight: When the world’s most indebted major economy signals it may trade tax revenue for political leverage, markets don’t wait. They reprice risk in real time.
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🔍 Deeper Dive: ISO 20022 Goes Live — Is XRP Ready to Bridge the System?
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