Overnight, while the US slept

Risk came off ahead of the Fed: US equities closed lower across the board on Tuesday, with the S&P 500 down 0.45% to 7,585.73, the Nasdaq Composite off 0.78% to 25,981.57 and the Dow down 328 points (0.63%) to 52,093.11. Nothing dramatic, but nothing brave either — this was a market flattening out before a binary event.

Rates & DXY: The US 10-year yield pushed another ~6bp higher to about 5.025%, a 19-year high, with the 2-year around 4.68%. That leaves the 2s10s spread (the gap between 2-year and 10-year yields, which tells you whether the bond market fears inflation or recession) near +35bp — essentially unchanged from last week. The message matters more than the levels: the whole curve has shifted up together rather than the front end alone. That is a market repricing inflation and the policy path, not one bracing for a growth accident. The dollar index (DXY — the greenback measured against a basket of major currencies) sits near 99.55, a two-week high.

The driver — a supply shock with the policy door wide open: Brent is holding near $107 with Saudi Arabia's East–West pipeline still shut after drone strikes and the Gulf–Iran Hormuz talks stalled. Worth being precise about the mechanism here, because it is the opposite of what most people assume about war and gold. This is a supply-side shock (a disruption that makes things more expensive to produce, rather than a panic that makes people hoard safety). Expensive energy feeds into inflation; inflation forces the central bank to tighten; tighter policy lifts real rates (interest rates after subtracting inflation); higher real rates and a stronger dollar are both bad for gold, which pays no interest. That chain only works if the central bank actually reacts — and this one is about to. With ~90% priced for a 25bp hike, the policy channel is wide open, and gold has been bleeding accordingly.

Gold: trading 4293.99 / 4294.19. Range through the last session 4261.38–4317.42; the session before that ran 4253.59–4355.44. So gold is roughly $61 below the prior session's high and grinding out a third consecutive week of lower highs. I'd stay with the bearish read while the policy channel stays open — but I want to say plainly that it is the Fed's forecasts, not the oil headlines, that decide whether this continues.

Crypto: Bitcoin 75,620 (RSI M15 37.98 — RSI measures whether a move has run too far too fast; under 30 is oversold, over 70 overbought — ATR $454.84, ATR being the average size of a recent price swing). Day range 75,568.45–75,895.05, prior-day 74,871.95–78,990.93. That is a $4,119 prior-day range, a 5.2% peak-to-trough flush, and Bitcoin is now sitting barely $750 above the low of it. Ether 2,396.45 (RSI M15 38.93, ATR $19.51); day 2,390.76–2,402.86, prior-day 2,354.26–2,561.07 — an 8.1% range, meaningfully worse than Bitcoin. The laggard is still lagging.

Key FX:

• EURUSD 1.15374 — RSI 43.05 (neutral), ATR 2.4 pips. Day H/L 1.15392/1.15340, prior-day 1.15530/1.15271. A 26-pip prior-day range is unusually tight; the euro is coiled and, as the most oil-import-exposed major bloc, structurally on the wrong side of $107 Brent.
• GBPUSD 1.34757 — RSI 46.18, ATR 3.9 pips. Day H/L 1.34777/1.34681, prior-day 1.35047/1.34643. UK inflation lands in our afternoon; cable is a coin flip until then.
• USDJPY 155.136 — RSI 55.30 (neutral, upper half), ATR 4.5 pips. Day H/L 155.156/155.069, prior-day 155.240/154.211. Sitting just under the prior-day high, in a zone where Japan's Ministry of Finance has historically started making noise about the yen's weakness, and with the Bank of Japan widely expected to lift its policy rate to 1.25% on Friday.
• AUDUSD 0.71279 — RSI 44.00, ATR 2.5 pips. Day H/L 0.71329/0.71216, prior-day 0.71414/0.71171. Heavy, but in a 24-pip box.
• NZDUSD 0.57576 — RSI 46.28, ATR 2.8 pips. Day H/L 0.57667/0.57539, prior-day 0.57831/0.57505. Same story as the Aussie, slightly more range.
• USDCHF 0.81842 — RSI 39.85, ATR 3.3 pips. Day H/L 0.81922/0.81764, prior-day 0.81992/0.81589. The franc is the one currency holding its own against the dollar — a genuine safe-haven bid.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	7,585.73	−0.45%	Risk-off
Nasdaq Composite	25,981.57	−0.78%	Risk-off
US 10Y	~5.025%	+6bp, 19-year high	Hawkish
US 2Y	~4.68%	Steady	2s10s ~+35bp — curve shifting up in parallel
DXY	~99.55	Firm, two-week high	USD bid
Gold	4,294.09	−$61 from the prior session's 4,355.44 high	Bearish — supply shock, policy door open
Bitcoin	75,620	−$3,371 from the prior-day 78,990.93 high	Weak
Ether	2,396.45	−$165 from the prior-day 2,561.07 high	Weakest of the majors
Brent	~$107	+~1.3%	Saudi pipeline shut, Hormuz talks stalled

Normal liquidity, but a compressed one: ranges in the majors have shrunk to a fraction of their usual size because nobody wants size on before tomorrow morning's decision. Expect thin, jumpy price action in our session and the real volatility after 04:00 AEST Thursday.

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