Overnight, while the US slept

Records on Wall Street as the war premium bleeds out: The S&P 500 added 1.8% (+136.02 pts) to close at 7,736.52 — a fresh all-time high — while the Nasdaq Composite ripped 2.6% (+671.10) to 26,584.99 on the back of the AI complex. Breadth backed the move up rather than papering over it: advancers beat decliners roughly 2.8-to-1 on the NYSE and 2.9-to-1 on the Nasdaq, and eight of eleven S&P sectors finished green. This was a broad risk-on session, not four megacaps carrying an index.

Rates & DXY: The 10-year Treasury yield eased to 4.65% from Monday's 18-month high of 4.75%, and the 2-year slipped to 4.198%. That leaves the 2s10s spread (the gap between 2-year and 10-year yields, a read on where policy is heading) at roughly +45bp and steepening — and the shape is the story here, not the level. Front-end yields fell hardest because traders cut the odds of a September Federal Reserve hike to about 57% from 67%. That is a textbook bull steepener: the market marking down the policy path, not the growth outlook. The dollar index (DXY, the greenback measured against a basket of major currencies) is loitering near 99.7, within a whisker of Monday's seven-week low at 99.42.

The dominant driver — Hormuz: Washington, Tehran and Muscat are circling an interim arrangement to reopen the Strait of Hormuz, with inbound ships transiting Iranian waters and outbound traffic going via Oman. Treasury Secretary Scott Bessent said a deal could land this week; President Trump, after a full day of negotiation, offered "it looks like things are very good." Brent sat around $79.43 and WTI near $75.27, oil's third straight down session. The caveat I keep front of mind: an almost identical memorandum was signed on 17 June and collapsed within days, and Iran-aligned Houthi forces claimed a strike on a Saudi tanker overnight. This is not a done deal.

Gold: trading 4246.83/4247.04. Day range 4065.56–4267.62; prior-day high/low 4106.32 / 4042.64 — so we are $140 above yesterday's ceiling after a genuinely violent repricing. Apply the framework properly here. A supply-side shock (an oil spike from conflict) normally makes central banks hawkish, pushes real rates (interest rates after subtracting inflation) up, and is bearish gold despite the headlines — that chain is precisely what has kept gold pinned near $4,000 while the strait was shut, a long way from January's $5,597 record. What happened overnight is that chain running in reverse: the supply shock is unwinding, so the policy channel that was suppressing gold is being switched off. Nominal yields fell further than inflation expectations, real rates dropped, and gold got its release valve. My read is that this is a repricing of the policy path, not a one-day headline pop — which is why I want to be long, but at a better price.

Crypto: Bitcoin 64,638 (RSI M15 48.6, ATR $121.79); day 64,589–64,760, prior-day high/low 64,963 / 63,804. Ether 1,907.58 (RSI M15 52.3, ATR $7.46); day 1,884.32–1,912.07, prior-day high/low 1,925.32 / 1,851.92. Both are mid-range and both conspicuously failed to join gold's melt-up — total crypto market cap around $2.27tn on a 0.7% daily gain, with a Fear index of 27. The debasement bid went to bullion, not to blockchains. I find that interesting rather than damning: crypto is the laggard high-beta expression of the same trade.

Key FX:

• EURUSD 1.15533 — RSI 53.8 (neutral: RSI is a 0–100 momentum gauge, above 70 is stretched, below 30 is washed out), ATR 3.7 pips. Day H/L 1.15569 / 1.15512, prior-day H/L 1.15595 / 1.15267. Stabilised near 1.15 after the New York Fed sold euros to fund last week's yen purchases.
• GBPUSD 1.34646 — RSI 46.2, ATR 5.3 pips. Day H/L 1.34718 / 1.34534, prior-day H/L 1.34861 / 1.34427. Sterling is the laggard of the dollar-down move; the Bank of England held at 3.75% on 29 July with three of nine members voting to hike.
• USDJPY 157.732 — RSI 53.5, ATR 5.3 pips. Day H/L 157.749 / 157.708, prior-day H/L 157.876 / 157.306. The yen has steadied after coordinated Japanese Ministry of Finance and US intervention (official buying of yen to defend the currency), having round-tripped from Monday's 155.20 high back through 157.
• AUDUSD 0.70560 — RSI 49.3, ATR 3.0 pips. Day H/L 0.70586 / 0.70478, prior-day H/L 0.70647 / 0.70366. Rangebound ahead of next Tuesday's Reserve Bank decision, where all four majors expect 4.35% held.
• NZDUSD 0.58894 — RSI 60.0, ATR 3.0 pips. Day H/L 0.58898 / 0.58824, prior-day H/L 0.58964 / 0.58598. The strongest momentum reading in the majors, sitting right on its session high.
• USDCHF 0.80720 — RSI 43.5, ATR 4.1 pips. Day H/L 0.80749 / 0.80650, prior-day H/L 0.81015 / 0.80640. Grinding lower with the dollar.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	7,736.52	+1.8% (record close)	Risk-on
US 10Y	4.65%	Falling (from 4.75%)	Dovish — front-end led
DXY	~99.7	Near 7-week low (99.42)	USD weak
Gold	4,246.93	+$140.61 vs prior-day high	Bullish — policy channel reopening
Bitcoin	64,638	−$325 vs prior-day high	Neutral, lagging badly
Brent	~$79.43	Third down session	Hormuz deal hopes

Normal session, healthy liquidity. Spreads at the Sydney open are typically wider than mid-session — worth waiting a few minutes before working orders in the crosses.

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