Overnight, while the US slept

Payrolls broke the week's narrative. US employers added 162,000 jobs in August against expectations closer to 55,000, with unemployment steady at 4.1%. Wall Street took it badly: the S&P 500 slid 0.38% to 7,718.60, the Nasdaq Composite lost 0.29% to 26,506.99 and the Dow fell 271.86 points (0.51%) to 53,414.25. Good news for workers, awkward news for anyone hoping the Federal Reserve was finished tightening.

Rates & DXY: The 10-year Treasury yield rose 1.8 basis points to 4.782% while the two-year — the maturity that tracks Fed policy most closely — jumped 5.3bp to 4.39%. That's a bear flattening: the short end led the move, which is the bond market's way of saying it now expects the Fed to act, not that it expects stronger long-run growth. The 2s10s gap (the spread between two- and ten-year yields) narrowed to roughly 39bp. CME FedWatch odds of a hike at the 15–16 September meeting jumped to about 59% from 52% pre-release. The dollar index (DXY — the greenback against a basket of major currencies) added 0.3% to 99.23.

The oil shock now has a central bank willing to answer it. Brent sits near $95, up roughly 8% on the week, after fresh US strikes on Iranian targets and Iranian retaliation against US bases and vessels transiting the Strait of Hormuz. Transits through the strait thinned to six commodity vessels on Wednesday from eleven on Tuesday against a ten-day average near thirteen. This is a textbook supply-side shock (higher prices caused by constrained supply rather than strong demand) — and I want to be precise about why that matters for gold. A supply shock only turns bearish for gold if the central bank actually leans against it, pushing real rates (interest rates after subtracting inflation) higher. Last week that channel looked jammed: Waller's softer inflation commentary had the front end falling and I was long gold on exactly that logic. Friday's payrolls unjammed it. I got that call wrong and it cost the book a full stop; what changed is that the Fed now plainly has both the mandate cover and the market pricing to tighten into the shock.

Gold: trading 4428.20/4428.28. Day range 4417.73–4430.17 since the 08:00 reopen; Friday's high/low 4490.76 / 4365.72. Gold gapped a touch lower on the reopen (4423.23 against Friday's 4430.26 close) and has since crept back — it is sitting almost exactly on the midpoint of Friday's range, which tells you the market has not yet chosen. My read is that it chooses lower while the policy channel stays open.

Crypto: Bitcoin 79,722.95 (RSI 42.2, ATR $142.10); day 79,633.33–80,045.13, prior-day high/low 80,118.63 / 79,200.43. It bounced hard off Sunday's 79,200 low but has faded again in the last hour and is making the session's low as I write — soft. Ether 2,496.30 (RSI 49.5, ATR $6.64); day 2,487.92–2,515.07, prior-day high/low 2,522.72 / 2,447.47. Ether is the relative-strength story of the month, up sharply against Bitcoin, and it held its ground far better through Sunday's flush. That divergence is the interesting part of crypto right now.

Key FX:

• EURUSD 1.16130 — RSI 49.5 (neutral), ATR 2.5 pips. Day H/L 1.16132 / 1.16071, prior-day H/L 1.16331 / 1.15851. Sitting mid-range and going nowhere in Asia; the ECB on Thursday is its next real catalyst.
• GBPUSD 1.35160 — RSI 47.8, ATR 4.2 pips. Day H/L 1.35221 / 1.35099, prior-day H/L 1.35491 / 1.34825. Sterling recovered most of the payrolls drop but hasn't reclaimed Friday's highs.
• USDJPY 156.244 — RSI 56.0, ATR 6.9 pips. Day H/L 156.271 / 155.971, prior-day H/L 156.759 / 155.293. Grinding higher on the rate differential. I'd start watching for Ministry of Finance intervention chatter (Japan's Treasury stepping in to buy yen) if we push through 158.
• AUDUSD 0.72056 — RSI 53.3, ATR 2.8 pips. Day H/L 0.72059 / 0.71944, prior-day H/L 0.72147 / 0.71732. Resilient, and it should be: the Australian rate market has roughly a two-in-three chance of an RBA hike on 29 September priced in.
• NZDUSD 0.58812 — RSI 48.4, ATR 3.2 pips. Day H/L 0.58823 / 0.58722, prior-day H/L 0.59023 / 0.58559. The weaker antipodean; no domestic support to match Australia's.
• USDCHF 0.81003 — RSI 53.5, ATR 3.3 pips. Day H/L 0.81021 / 0.80891, prior-day H/L 0.81267 / 0.80602. The franc gave back its haven bid as yields rose — another vote for the dollar-strength read.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	7,718.60	−0.38%	Risk-off
US 10Y	4.782%	Rising (+1.8bp)	Hawkish
DXY	99.23	+0.3%	USD firmer
Gold	4,428.24	−62.52 from Friday's 4,490.76 high	Bearish — supply shock with an open policy channel
Bitcoin	79,722.95	−395.68 from Sunday's 80,118.63 high	Weak
Brent	~$95	+8% on the week	Hormuz supply risk

US equity and bond markets are closed today for Labor Day, so liquidity will be poor across FX, gold and crypto. Thin books exaggerate moves and run stops on noise — position accordingly.

---