Overnight, while the US slept

A global bond sell-off ran the show: US equities closed broadly lower — the S&P 500 −0.71% to 7,631.47, the Nasdaq Composite −1.03% to 26,099.77, and the Dow −419 points (−0.79%) to 52,766.88. There was no single stock story here; the move started in the bond market and rolled downhill into everything else.

Rates & DXY: The US 10-year Treasury yield rose for a fifth straight session to roughly 4.79–4.80%, its highest since January 2025, with the 30-year up near 5.28%. That is a bear-steepening curve — the long end selling off harder than the front — and the message in that shape is inflation and term premium, not growth. Futures markets now put roughly a two-thirds probability on a 25bp Fed hike later this month, helped along by Chair Warsh's line that the Fed still has "work to do" on prices. The dollar index (DXY — a basket measure of the US dollar against six major currencies) sat just under 100 and firm.

Middle East escalation is the fuel: US forces struck Iranian rocket launchers on Larak Island, Tehran hit back at targets in the UAE and Jordan, and a supertanker caught fire after striking naval mines in the southern Strait of Hormuz. Brent pushed above $91 (+0.9%). This is a textbook supply-side shock (a disruption that raises the cost of producing things, rather than a collapse in demand) — and critically, the policy channel is wide open. Central banks are responding to it by getting more hawkish, not less. Higher expected policy rates push up real rates (interest rates after subtracting inflation), and gold pays no interest, so it loses the competition. That's why war headlines are selling gold this week rather than buying it. My read: the moment the Fed blinks and refuses to tighten into this, the same shock flips gold bullish — but we are nowhere near that yet.

Gold: trading 4328.21/4328.43. Session range 4322.91–4461.51; prior-day H/L 4472.05 / 4396.52. That is a $138 range and gold is sitting within $6 of the low of it — a genuine capitulation session, not a drift. M15 RSI (a 0–100 momentum gauge; under 30 is stretched-oversold) at 35.4 is weak but not yet washed out, which tells me there's room for one more leg before this stabilises.

Crypto: Bitcoin 77,029 (M15 RSI 39.6, ATR $306); session 76,812–77,310, prior-day H/L 79,181 / 76,370. It opened Tuesday firm near $78.5k and gave all of it back — the same rates story, since coins pay no yield either. Ether 2,406.82 (M15 RSI 39.5, ATR $12.5); session 2,397–2,416, prior-day H/L 2,483.62 / 2,380.87. Ether is the weaker of the two and is basing on its lows rather than bouncing, which I don't read as constructive.

Key FX:

• EURUSD 1.15899/1.15905 — RSI 47.9 (neutral), ATR 2.8 pips. Session H/L 1.15911 / 1.15879, prior-day H/L 1.16246 / 1.15848. Euro-area flash inflation printed 3.3% for August, the hottest since September 2023, and markets now fully price an ECB hike to 2.5% — and the euro still fell. When a currency can't rally on its own hawkish data, the other side of the pair is in charge.
• GBPUSD 1.35161/1.35171 — RSI 45.9, ATR 4.2 pips. Session H/L 1.35176 / 1.35069, prior-day H/L 1.35596 / 1.35063. Cable is pinned to the bottom of its range with no domestic catalyst.
• USDJPY 160.179/160.189 — RSI 51.5, ATR 4.2 pips. Session H/L 160.200 / 160.123, prior-day H/L 160.274 / 159.635. The widest yield gap in over a year is doing exactly what it should to the yen. I'm watching 160.27 — a clean break invites a run, but this is also the zone where Japan's Ministry of Finance has historically stepped in to buy yen (MOF intervention).
• AUDUSD 0.71480/0.71486 — RSI 50.7, ATR 2.8 pips. Session H/L 0.71507 / 0.71422, prior-day H/L 0.71809 / 0.71390. Down 33 pips from yesterday's high, and today it has its own event risk.
• NZDUSD 0.58931/0.58948 — RSI 49.2, ATR 2.3 pips. Prior-day H/L 0.59290 / 0.58875. Grinding lower with the Aussie, no independent story.
• USDCHF 0.81146/0.81166 — RSI 48.3, ATR 3.5 pips. Prior-day H/L 0.81249 / 0.80745. The franc is not catching a haven bid, which is another tell that this is a rates move, not a fear move.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	7,631.47	−0.71%	Risk-off
US 10Y	~4.79%	Rising (5th session)	Hawkish
DXY	just under 100	Firmer	USD bid
Gold	4,328.21	−$68 vs prior-day low	Bearish — supply shock + open policy channel
Bitcoin	77,029	−$2,152 vs prior-day high	Weak
Brent	~$91.3	+0.9%	Hormuz risk premium

Normal full-liquidity session ahead, with three genuine data catalysts.

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