Overnight, while the US slept

Equities ended a hawkish week on the front foot, but only just: Wall Street closed Friday mixed after a volatile five sessions. The Dow shed 95.40 points (−0.18%) to 51,682.64, the S&P 500 added 0.17% to 7,650.50, and the Nasdaq Composite rose 0.39% to 26,522.55. Index futures have opened the new week firmer — the S&P contract is trading 7,667 and the Nasdaq 100 contract 29,730 — but both are running hot on short-term momentum readings (RSI, a 0–100 gauge of how stretched a move is, at 75 and 77 respectively). That is not a level I like to buy into.

Rates & DXY: The US 10-year yield closed Friday up almost 6 basis points at 5.006%, having earlier in the week touched its highest since 2007. The more interesting action is at the short end: 2- and 3-year yields have spiked toward 5% while the 10-year has stalled, so the curve is flattening from the front — the bond market is pricing more Fed tightening now rather than more growth later. That is a hawkish message, not a reflationary one. The dollar index sits near 100.2 and finished Friday essentially unchanged.

The week's dominant driver — the Fed hiked, and told us it isn't finished: The FOMC voted unanimously on Wednesday to raise rates 25bp to 3.75–4.00%, the first hike in three years. The dot plot (each official's private forecast for where rates end up) was hawkish: twelve of eighteen participants pencilled in one more hike this year, four saw two. Chair Warsh offered no forward guidance, framing the Fed as committed to a discipline rather than a decision. Goldman Sachs has since moved to calling another 25bp in October.

Apply the framework properly here. The oil shock is a supply-side shock (a disruption to production rather than a surge in demand) — Saudi Arabia's East–West pipeline, which moves 4–5 million barrels a day and bypasses the Strait of Hormuz, was shut on 11 September after a drone strike. Brent spiked near $109. That chain only turns bearish for gold if the central bank actually reacts to it — and this one plainly has. Real rates (interest rates after subtracting inflation) are rising, the policy channel is wide open, and Saudi Arabia is restoring roughly half the line within days and the full line inside six weeks, with Brent back to around $104. My read: that is a gold-negative configuration, and I'd treat last week's bounce as relief inside a downtrend rather than a turn.

Gold: trading 4375.21/4375.24. Early Sydney range 4373.07–4382.24; Friday's session ran 4334.33–4399.63 and settled 4377.89, capping the first weekly gain in four. Short-term momentum is neutral at 46.9. Gold is still beneath its 200-day moving average (the long-run trend line big funds watch) and stuck between that and the 50-day. The genuine counter-argument to my bearish lean: gold ETFs have now logged eight straight sessions of net inflows, the longest streak since October 2025, with holdings at a seven-month high. Real money is buying this dip even as yields climb. I respect that — which is why I want to sell a rally into resistance rather than sell here.

Crypto: Bitcoin 81,141 (momentum 55.4, short-term range gauge $211); weekend range 80,089–81,457 after a Friday session that ran 76,164 up to 81,386 — a near-7% surge as traders moved past the Senate's rejection of the CLARITY Act and the Fed decision. Holding the entire move through a quiet weekend without giving back more than $1.1k is constructive, not distributive. Ether 2,637 (momentum 59.2, range gauge $11.6); weekend 2,560.87–2,647.57 after Friday's push from 2,432.88 to 2,643.07. Ether is the stronger chart of the two but has run further.

Key FX:

• EURUSD 1.14819 — momentum 52.3 (neutral), short-term range 3.0 pips. Early range 1.14780/1.14863, Friday 1.14548/1.14918. Compressing into the top of Friday's range after the post-Fed slide. Eurozone flash PMIs Wednesday are the next real test.
• GBPUSD 1.33908 — momentum 56.3, range 5.1 pips. Friday 1.33356/1.33982. The BoE held Bank Rate at 3.75% in a 6-3 vote with a dovish surprise on bond sales; sterling has held up better than that deserves.
• USDJPY 156.979 — momentum 55.9, range 7.0 pips. Friday was violent: 155.871 to 158.056 and back to 156.874. The BoJ hiked 25bp to 1.25% (7-2, with Asada and Sato dissenting), Ueda then walked back the hawkish read, and the yen sold off — until the BoJ conducted a rate check with market participants late Friday, per Nikkei, and USDJPY fell 157.70 to 157.00 in three minutes. A rate check is the standard prelude to actual intervention. I'm watching this more closely than anything else on the board.
• AUDUSD 0.71238 — momentum 52.7, range 3.2 pips. Friday 0.71039/0.71364. Waiting on Thursday's jobs print.
• NZDUSD 0.57232 — momentum 54.2, range 3.4 pips. Friday 0.57058/0.57408. No domestic catalyst this week; a pure dollar expression.
• USDCHF 0.82223 — momentum 45.4, range 4.6 pips. Friday 0.82161/0.82600. The SNB is expected to sit still on Thursday.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	7,667	+0.2% vs 7,650.50 Fri cash close	Risk-on, but stretched
US 10Y	5.006%	Rising (+6bp Friday)	Hawkish
DXY	~100.2	Flat	USD firm
Gold	4,375	−$3 vs Friday close, −$24 from Friday's high	Bearish while real rates climb
Bitcoin	81,141	Holding Friday's +6.9%	Constructive
Brent	~$104	−2.3% Friday	Supply fear unwinding

Context: Japan is closed today for Respect for the Aged Day and there is no tier-one data anywhere. Expect thin books, wide-ish spreads in the Asian morning, and be sceptical of breakouts that happen on nothing.

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