Overnight, while the US slept

The inflation trade finally bit: US equities closed lower for a fourth consecutive session, dragged down by the twin weights of a spiking oil price and a bond market repricing hard for a Federal Reserve rate hike next week. August producer prices — the wholesale cost gauge that feeds through to shop prices a few months later — came in at 5.4% year-on-year against 5.3% expected, with core producer prices accelerating to 4.6% from 4.3%. That was the print that broke the fence-sitting.

Rates & DXY: The US 10-year yield pushed above 4.92%, its highest since July 2023, and the 30-year surged to roughly 5.3% — within touching distance of its 2007 peak. That shape matters more than the levels: the long end is leading this move, which is the bond market saying it has an inflation and term-premium problem, not simply a one-off policy tweak. Odds of a 25bp hike at the 15–16 September meeting jumped to around 70%. The dollar index had actually slid four sessions running to about 98.4 — a four-month low — on yen strength earlier in the week, but the bid came roaring back through the US afternoon and you can see it plainly in the crosses below.

The driver — a supply-side shock with the policy channel wide open: Iranian forces targeted two US vessels near the Strait of Hormuz overnight and Houthi rebels seized a key western Yemeni port. The Strait has been effectively closed since March. Brent sits around $101 after printing north of $105 intraday; WTI is through $100. This is the framework I keep coming back to: an oil-driven (supply-side) inflation shock is only bearish for gold if the central bank actually reacts to it. This one is reacting — hike odds at 70%, real rates (interest rates after subtracting inflation) rising, dollar bid. So the shock is bearish gold, and price action has agreed emphatically.

Gold: trading 4316.58/4316.78. Session range 4313.76–4434.62; the prior day printed 4434.10 / 4341.23. Gold nudged out a marginal new high at 4434.62 and then collapsed 120.86 dollars into 4313.76 — a textbook outside-day reversal, and it's sitting near the lows as I write. The 15-minute RSI (a momentum gauge; below 30 is "oversold", or stretched to the downside) is at 25.5, so a bounce would not surprise me. My read is that a bounce is something to sell, not something to buy.

Crypto: Bitcoin 77,218 (15-min RSI 48.9, ATR — average recent candle size — $142). Session range 77,130.98–77,267.38; prior day 78,519.98 / 76,612.48. It flushed to 76,612 on the producer-price print and has spent the last few hours grinding sideways in a tight band without reclaiming much. Ether 2,460.50 (RSI 52.8, ATR $6.37); session range 2,455.47–2,460.57, prior day 2,482.97 / 2,402.57. Ether has clawed back about two-thirds of its flush — the stronger of the two, but it's a recovery inside a downtrend, not a base.

Key FX:

• EURUSD 1.16103 — RSI 41.4 (neutral, soft), ATR 3.0 pips. Prior-day H/L 1.16418 / 1.15922. The euro area is the most oil-import-exposed major bloc; $100 Brent is a straight terms-of-trade hit while the ECB sits on its hands.
• GBPUSD 1.35125 — RSI 44.3, ATR 4.7 pips. Prior-day H/L 1.35603 / 1.34914. Sold hard through the US session, bounced, and is now mid-range. No clean edge.
• USDJPY 154.392 — RSI 58.3, ATR 5.7 pips. Prior-day H/L 154.672 / 153.284. That's a 138-pip range and the dollar won it. Above 155 the Ministry of Finance intervention watch (Japan stepping into the market to defend the yen) gets serious.
• AUDUSD 0.71592 — RSI 38.0, ATR 3.0 pips. Prior-day H/L 0.72231 / 0.71554. Hammered — 68 pips from high to low. The Aussie is a risk proxy and an oil importer, so it gets hit twice.
• NZDUSD 0.57998 — RSI 42.3, ATR 2.9 pips. Prior-day H/L 0.58568 / 0.57933. Same story, worse. Spread is wide at 1.7 pips.
• USDCHF 0.81304 — RSI 55.9, ATR 2.9 pips. Prior-day H/L 0.81474 / 0.80844. The franc lost its haven bid to the dollar's yield advantage — telling.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	—	4th straight daily decline	Risk-off
US 10Y	~4.92%	Highest since July 2023	Hawkish
US 30Y	~5.3%	Surging, long end leading	Term premium
DXY	~98.4	Off a four-month low, bid returning late	USD firmer
Gold	4316.68	−117.4 from prior-day high 4434.10	Bearish (supply shock + open policy channel)
Bitcoin	77,218	−1,302 from prior-day high 78,519.98	Weak
Brent	~$101	Printed >$105 intraday	Hormuz closure

Normal session, but a genuine binary sits at 22:30 AEST. Expect thin, headline-driven Asian trade until London.

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