Overnight, while the US slept

Wall Street snapped a four-day losing streak into the weekend: the S&P 500 closed Friday +0.86% at 7,656.98, the Nasdaq Composite +0.96% at 26,333.04 and the Dow +0.98% (509 points) at 52,573.29. The rally leaned on a near-3% pullback in Brent that afternoon, which took a little heat out of the inflation story. That relief now looks premature.

Rates & DXY: the US 10-year finished Friday at 4.98% with the 2-year at 4.63% — a curve spread of roughly 35 basis points (the gap between short- and long-dated government borrowing costs). The shape matters more than the level here: the front end has been doing nearly all the work as rate-hike odds have climbed, so the curve is flattening from the short side. That is the market saying "tighter policy now, slower growth later" rather than "boom". The dollar index (DXY — the US dollar measured against a basket of major currencies) is holding just above 99.00.

The dominant driver — a supply shock with the policy door wide open: August core CPI came in at +0.3% month-on-month against a +0.2% consensus, with producer prices up 0.4%, and energy did most of the damage. Markets had roughly 85% priced by Friday's close for a 25bp hike to 4.00% on Wednesday. Then on Sunday, Oman's foreign minister announced that Monday's Salalah meeting between Iran, the Gulf states and Iraq on Strait of Hormuz shipping had been postponed indefinitely. Crude has firmed again this morning, with WTI up around 2.5% near $102.50 after Brent settled close to $104 on Friday.

This is the textbook supply-side shock (inflation caused by something getting scarcer or dearer to produce, not by people spending more): oil spikes → headline and pass-through inflation stays hot → the central bank tightens → real rates (interest rates after subtracting inflation) rise → the dollar gets both a yield bid and a haven bid → gold falls. The critical test in that chain is whether the central bank actually reacts, and this one plainly is. When the policy door is open like this, "more conflict" does not mean "buy gold" — it has meant the opposite for three weeks running. I'd keep leaning on that until the Fed tells me otherwise on Wednesday.

Gold: trading 4331.43/4331.53. Day range 4322.22–4355.44; prior-day high/low 4402.51 / 4288.33. That prior session was a $114 range, which tells you how nervous this market is. Price sits in the lower half of it, roughly $71 below Friday's high, with RSI on the 15-minute chart at 46.1 — soft, not washed out. My read is that gold is coiling under resistance into the decision rather than basing.

Crypto: Bitcoin 77,495 (15-min RSI 56.4, ATR $186.71); day 76,323.64–77,833.53, prior-day high/low 77,400.44 / 76,425.64. Bitcoin is quietly the strongest thing on my screen — it is trading above Friday's high while gold sits well below its own, which is not what you would normally expect into a hawkish central bank. Ether 2,509.67/2,512.73 (15-min RSI 58.1, ATR $6.71); day 2,461.37–2,517.87, prior-day high/low 2,526.97 / 2,458.37. Ether is the laggard — still capped by Friday's high and unable to join Bitcoin's breakout.

Key FX:

• EURUSD 1.15675 — RSI 31.3 (oversold), ATR 3.5 pips. Day H/L 1.15982 / 1.15623, prior-day H/L 1.16175 / 1.15692. Broke below Friday's low and has stayed there. The euro area is the most oil-import-exposed major bloc and its central bank is parked — a brutal combination right now.
• GBPUSD 1.35034 — RSI 35.5, ATR 3.3 pips. Day H/L 1.35286 / 1.35007, prior-day H/L 1.35348 / 1.34797. Heavy, but holding above Friday's low ahead of UK CPI on Wednesday.
• USDJPY 153.998 — RSI 58.7, ATR 8.7 pips. Day H/L 154.142 / 153.369, prior-day H/L 154.617 / 153.241. A 138-pip prior-day range shows both central banks pulling on the rope. Above 155 I'd start watching for Japanese Ministry of Finance intervention chatter (official yen-buying to slow a disorderly move).
• AUDUSD 0.71467 — RSI 38.1, ATR 2.9 pips. Day H/L 0.71691 / 0.71408, prior-day H/L 0.71877 / 0.71499. Trading below Friday's low with China data tomorrow.
• NZDUSD 0.57838 — RSI 29.6 (oversold), ATR 3.0 pips. Day H/L 0.58190 / 0.57813, prior-day H/L 0.58352 / 0.57931. The weakest major on the board — a clean break of Friday's low with no bounce yet.
• USDCHF 0.81809 — RSI 62.0, ATR 2.4 pips. Day H/L 0.81845 / 0.81582, prior-day H/L 0.81706 / 0.81244. Trading above Friday's high — a genuine dollar breakout against the one currency that should be catching a haven bid from the Gulf. That tells you how much the yield story is dominating.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	7,656.98	+0.86% (Fri)	Risk-on, but oil-dependent
US 10Y	4.98%	Rising	Hawkish
US 2Y	4.63%	Rising faster	Curve flattening from the front
DXY	~99.1	Firm above 99.00	USD bid
Gold	$4,331	−$71 from Fri high 4,402.51	Bearish — supply shock, policy door open
Bitcoin	$77,495	+$95 above Fri high 77,400	Quietly strong
Brent	~$104 (Fri settle)	WTI +~2.5% today	Hormuz talks postponed

Context: a light macro day into a very heavy week. Liquidity should be normal, but with the Fed in blackout and no top-tier data until tomorrow, positioning and headlines will do the moving.

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