Overnight, while the US slept

Wall Street marked time waiting for one company. US equities finished the session close to unchanged, with the S&P 500 hovering either side of the flatline all day and Nvidia itself down about 1.3% into its results. The chipmaker then reported after the bell: revenue of roughly $96.2bn against consensus near $92.4bn, adjusted earnings of $2.22 a share, gross margin around 75%, and a Q3 revenue outlook near $108bn — about $3.8bn above what the street wanted. On paper that is a big beat. The catch is that the last three quarters have also been beats and the stock has gone nowhere, so I'd be cautious about assuming an automatic risk-on handover into Asia. Elsewhere: Meta settled the social-media harm case with state attorneys general for $16.7bn, Abercrombie & Fitch ripped ~29% on a raised outlook, Intuit fell ~9% on soft guidance and Kohl's and Zoom both dropped on numbers.

Rates & DXY: The US 10-year sits around 4.64%, with yields up roughly two basis points across the curve after the inflation print. The 2-year is near 4.17–4.20%, leaving the 2s10s spread (the gap between two-year and ten-year yields, a rough read on where the market thinks policy is heading) around +47bp. What matters is the shape: this was a broadly parallel lift rather than a long-end blowout, which tells you the move was about policy risk, not term premium. The market is repricing the odds of an actual rate hike, not fretting about the deficit. The dollar index (DXY — the greenback measured against a basket of major currencies) firmed about 0.24% to roughly 99.15, though it is still camped near a three-month low thanks to the Treasury's expanded long-bond buyback programme.

The overnight driver — a hot headline PCE: July's PCE price index (the Fed's preferred inflation gauge) rose 0.2% on the month against 0.1% expected, and 3.7% on the year against 3.6% expected. Core PCE — the version that strips out food and energy — held at 3.3% year-on-year, unchanged from June and in line. So it is a genuinely mixed print: the headline is uncomfortable, the core is stable. GDP for Q2 was confirmed at 1.5% and durable goods orders rose 1.1% against 0.5% expected. The reason this matters more than usual is the reaction function sitting behind it. July's FOMC produced three dissents in favour of a 25bp hike — the first time in a decade the committee has split three ways in the same hawkish direction — and Chair Kevin Warsh followed up with "there is no soft inflation target, there is no soft implicit target, not on this Committee's watch." Market-implied odds of a September hike now sit somewhere in the 50–61% range depending which venue you read. Treat those numbers as approximate; they move hourly.

The second driver — Hormuz: Iran's IRGC said it has reached a revenue-sharing agreement with Oman over the Strait of Hormuz, following Tuesday's joint statement on an "interim framework" for a temporary navigational corridor and mine-clearing. The strait — which carried about a fifth of the world's seaborne oil and LNG before the war — has been largely closed since March. Brent fell roughly 3% to about $86–87 and WTI to near $80. This is not a done deal: Netanyahu has told Washington a diplomatic settlement with Iran is "not possible," Tehran insists the US naval blockade must lift first, and Beijing has warned the US over new sanctions aimed at Iran's allies. But the direction of travel yesterday was clearly toward de-escalation.

Gold: trading 4594.57/4594.78. Session range 4583.09–4673.75; prior-day high/low 4696.78 / 4605.41. Gold printed above $4,700 early in the US morning and finished the session more than $100 lower, closing beneath the previous day's floor — a genuine bearish reversal, not noise.

Here is the framework I use, and it's worth spelling out because gold and geopolitics get lazily linked. A supply-side shock — say oil spiking on a blockade — pushes inflation up, forces central banks to tighten, lifts real rates (interest rates after subtracting inflation), and is therefore bearish gold despite the conflict. A demand-side safe-haven flight — financial stress, a credit event, war threatening the system itself without disrupting commodities — is bullish gold. The critical refinement is that the bearish chain only works if the central bank actually reacts. If a supply shock lands and policymakers hold through it, the transmission is blocked and the same shock turns bullish.

Right now the policy channel is wide open. We have three hawkish dissents, a Chair who talks like that, and a market pricing a coin-flip hike. And the supply shock is unwinding — the war premium is draining out of oil, which removes gold's conflict bid at the same moment real rates are being marked higher. Both legs point down. My read is that yesterday's break of 4605.41 is the market recognising exactly this, and I'd need something new to argue the other side.

I should own something here: I was long gold into yesterday and it cost me. Three gold longs were stopped out across Tuesday and Wednesday. The level structure I was buying was real, but I was reading the geopolitics as a demand-side haven bid when the actual driver turned out to be an unwinding supply premium meeting a central bank that is willing to tighten. That is the diagnosis I got wrong, and it's why I've flipped.

Crypto: Bitcoin 78,674 (RSI M15 57.9, ATR $208); session 78,279.63–78,860.33, prior-day high/low 79,240.13 / 77,595.23. Bitcoin cleared $80,000 on Tuesday for the first time in three months, printing 81,235 before unwinding, and has spent the last day chopping in the middle of that range. Last week's 23.6% gain was the strongest weekly move since March 2023 — driven by the Treasury doubling its long-bond buyback programme to $4bn per session and by warmer regulatory noises out of Washington. Ether 2,496.57 (RSI M15 68.9, ATR $9.52); session 2,471.39–2,502.89, prior-day high/low 2,481.69 / 2,411.39. Ether is the relative-strength story: it has pushed clear of yesterday's high while bitcoin sits below its own. RSI near 69 (the Relative Strength Index, a 0–100 momentum gauge where above 70 is conventionally "overbought") says it is stretched but not yet extreme.

Key FX:

• EURUSD 1.16532 — RSI 49.0 (neutral), ATR 2.5 pips. Day H/L 1.16536 / 1.16473, prior-day H/L 1.16775 / 1.16414. Grinding sideways at the lows after Tuesday's break. ECB July accounts land tonight.
• GBPUSD 1.35909 — RSI 39.0, ATR 3.6 pips. Day H/L 1.35949 / 1.35839, prior-day H/L 1.36512 / 1.35831. The weakest major overnight, down some 60 pips and sitting right on yesterday's floor.
• USDJPY 159.286 — RSI 41.8, ATR 3.2 pips. Day H/L 159.310 / 159.255, prior-day H/L 159.445 / 158.881. Still respecting the line under 160 that Japan's Ministry of Finance defended earlier this month. Nothing has changed there.
• AUDUSD 0.71706 — RSI 43.5, ATR 2.7 pips. Day H/L 0.71736 / 0.71624, prior-day H/L 0.71890 / 0.71588. Q2 capex at 11:30 AEST is the local event.
• NZDUSD 0.59433 — RSI 46.6, ATR 2.9 pips. Day H/L 0.59493 / 0.59408, prior-day H/L 0.59787 / 0.59328. Down nearly a full big figure from yesterday's high; classic high-beta behaviour when real rates rise.
• USDCHF 0.80528 — RSI 48.2, ATR 3.4 pips. Day H/L 0.80555 / 0.80393, prior-day H/L 0.80628 / 0.80101. A wide 53-pip prior-day range — the franc is not sitting still.

Cross-asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	≈7,680	≈ flat	Neutral — Nvidia the swing factor
US 10Y	4.64%	+2bp	Mildly hawkish
US 2Y	≈4.18%	+2bp	Hike risk live
DXY	≈99.15	+0.24%	USD firmer, still near 3-month lows
Gold	4,594.67	−$10.74 vs prior-day low	Bearish — real rates up, war premium leaking
Bitcoin	78,674	−$566 vs prior-day high	Mid-range, consolidating
Brent	≈$86–87	≈ −3%	Hormuz corridor talks

Index and yield levels are approximate; FX, gold and crypto levels are live at the time of writing. Normal liquidity today, thinning into the Jackson Hole weekend.

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