Overnight, while the US slept

Quiet green in equities, loud moves everywhere else: the S&P 500 finished up about 0.3% (roughly 7,675 — treat the exact print as approximate), with technology recovering after Monday's slide. Nvidia, however, has now fallen for seven consecutive sessions going into tonight's results. Consumer confidence was the soft spot: the Conference Board's August reading came in at 89.4 against 90.2 expected, a seven-month low, with petrol above $4 a gallon getting the blame. New home sales missed at 0.607M versus 0.620M, Case-Shiller beat at +2.1% y/y, and the Richmond Fed manufacturing index slipped to +4 from +5.

Rates & DXY: the US 10-year fell 8.1bp to 4.62%. Tuesday's $69bn 2-year auction stopped at a high yield of 4.204%, which puts the 2s10s spread (the gap between two-year and ten-year yields — the market's favourite shape gauge) somewhere near 40bp. The important detail is where the move happened: the long end did the work while the front end stayed put, helped by Boston Fed's Collins repeating that inflation is still too high. That's a flattening impulse, and it is exactly what you'd expect when a Treasury is actively buying back long bonds to cap the far end of the curve while the central bank refuses to ease the near end. The dollar index (DXY — the greenback measured against a basket of major currencies) is sitting around 99, at three-month lows, and dipped again late.

The headline that moved everything — a peace rumour out of Russia: state-owned Russian media reported an Iran-US deal, citing Iranian and Pakistani sources. Russian outlets haven't been part of the fake-leak carnival around this conflict, so the market gave it some credence. WTI crude fell $4.25 to $80.77 and finished on its lows. Bessent separately said Iranian leadership is "feeling the economic pressure," and Iran and Oman floated a joint temporary shipping lane.

Now apply the framework. The Iran war has been a supply-side shock (a hit to the supply of a commodity, which pushes inflation up while pushing growth down). Textbook, that chain runs: oil up → inflation sticky → central banks hawkish → real rates (interest rates after subtracting inflation) up → dollar bid → gold down. And you can see the policy channel is genuinely open in Europe: Reuters sources have the ECB ready to hike on 10 September specifically to stem the effects of the Iran war, with markets 94% priced for it. But in the US the channel is being deliberately blocked. The Treasury doubled its long-end buyback programme and is willing to lean on the General Account to fund it, which caps the very yields that are supposed to do the tightening. Supply shock plus a suppressed policy channel is the gold-bullish branch of that framework, not the bearish one. That is why gold rose $14 to about $4,665 on the same session that crude dropped four dollars. My read: this bid is a store-of-value bid, and an Iran deal on its own does not kill it.

Gold: trading 4658.70 / 4658.91. Session range 4605.41–4696.78; prior-day high/low 4680.96 / 4594.82. It's a three-month high, not a record — the all-time high near $5,589 was set back in January. RSI (a 0–100 momentum gauge where above 70 is stretched) sits at 58, so there's room. The overnight shape is a clean ladder of higher lows: 4634, 4644, 4653, 4658.

Crypto: Bitcoin 78,450.85 (RSI 38, ATR $262); session range 77,787.43–78,463.13, prior-day high/low 81,260.23 / 78,042.83. It punched above $80,000 for the first time in three months on the same debasement story lifting gold, tagged roughly 81,250, and then unwound the whole thing into the well-flagged liquidation pocket around $78,000. Ether 2,433.43 (RSI 30, ATR $10); session range 2,411.39–2,438.29, prior-day high/low 2,530.19 / 2,431.69 — down about 3.8% and now pinned to the prior-day low, with momentum properly oversold.

Key FX:

• EURUSD 1.16742 — RSI 53 (neutral), ATR 3.4 pips. Session H/L 1.16754 / 1.16712, prior-day H/L 1.16796 / 1.16510. The ECB source story is euro-supportive, but note the second half of it: little appetite to signal anything beyond September. The hike is priced; the path is being capped.
• GBPUSD 1.36500 — RSI 60, ATR 4.8 pips. Session H/L 1.36512 / 1.36339, prior-day H/L 1.36550 / 1.36221. Buyers in control, grinding at the prior-day high.
• USDJPY 159.223 — RSI 49, ATR 4.4 pips. Session H/L 159.239 / 159.192, prior-day H/L 159.490 / 159.019. Well clear of the 160 line Tokyo has defended, so no intervention watch this morning.
• AUDUSD 0.71620 — RSI 55, ATR 2.4 pips. Prior-day H/L 0.71683 / 0.71378. Coiled into the CPI print.
• NZDUSD 0.59762 — RSI 56, ATR 4.1 pips. Session H/L 0.59766 / 0.59650, prior-day H/L 0.59825 / 0.59464. The kiwi led all majors overnight.
• USDCHF 0.80152 — RSI 37, ATR 3.4 pips. Prior-day H/L 0.80423 / 0.80082. The franc was the laggard on the peace headline.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	≈7,675	+0.3%	Mildly risk-on
US 10Y	4.62%	−8.1bp	Long end leading, curve flattening
DXY	≈99	Soft, dipped late	USD weak, 3-month lows
Gold	4,658.81	−$37.97 from session high 4,696.78	Bullish — suppressed-policy branch
Bitcoin	78,450.85	−$2,809 from prior-day high	Weak after a failed breakout
WTI crude	$80.77	−$4.25 (−5.0%)	Peace rumour, closed on lows

Normal session ahead, but a front-loaded one: Australian inflation at lunchtime, the US data cluster tonight, and Nvidia after the US bell.

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