This week’s weekly market sentiment stayed with the dollar. It rose against all seven majors as Treasury yields surged and traders priced a further Federal Reserve hike as soon as October.
The 10-year Treasury yield jumped to 5.18%, its highest since the financial crisis, after hawkish remarks from Fed officials.
We flagged the dollar’s run in our 21 September market report, and it extended for a second straight week.
Weekly Market Sentiment Dashboard
| Symbol | Rating | Reason |
|---|---|---|
| Currencies | ||
| GBP | 🟠 ⬇️ Weak Bearish | Underperformed peers, near a three-month low. |
| USD | 🟢 ⬆️⬆️ Strong Bullish | Rose against every major on yields. |
| EUR | 🟠 ⬇️ Weak Bearish | Slid to its weakest since July. |
| JPY | 🟠 ⬇️ Weak Bearish | Yen slid as the rate gap widened. |
| AUD | 🟠 ⬇️ Weak Bearish | The week’s largest major decliner. |
| NZD | 🟠 ⬇️ Weak Bearish | Fell with the broader risk currencies. |
| CHF | 🟠 ⬇️ Weak Bearish | Franc gave back ground on the week. |
| DXY | 🟢 ⬆️⬆️ Strong Bullish | Second straight weekly gain above 101. |
| Indices | ||
| Nasdaq | 🟡 ⬆️ Weak Bullish | Record highs on an AI-led rally. |
| S&P 500 | 🟡 ⬆️ Weak Bullish | Edged higher despite the yield surge. |
| Dow Jones | ⚪ ➡️ Neutral | Flat as yields hit cyclical names. |
| Commodities | ||
| Gold (XAU) | 🟠 ⬇️ Weak Bearish | Fell as real yields climbed. |
| Oil (Brent) | ⚪ ➡️ Neutral | Held above $100 on two-sided risk. |
Last week’s calls
We grade our own dashboard every week. For 14 to 18 September 2026: 8 hits, 4 misses, 2 not graded. A hit means the rating pointed the way the market moved beyond a small dead band; a miss means it did not.
| Symbol | Last week’s rating | Weekly move | Result |
|---|---|---|---|
| GBP | Weak Bearish | -1.3% | Hit |
| USD | Strong Bullish | +0.8% | Hit |
| EUR | Weak Bearish | -0.9% | Hit |
| JPY | Strong Bearish | -0.7% | Hit |
| AUD | Weak Bearish | -1.3% | Hit |
| NZD | Weak Bearish | -0.9% | Hit |
| CHF | Data unavailable | -0.9% | Not graded |
| DXY | Strong Bullish | +0.8% | Hit |
| Nasdaq | Weak Bullish | +2.1% | Hit |
| ES | Data unavailable | n/a | Not graded |
| S&P 500 | Neutral | +0.6% | Miss |
| Dow Jones | Weak Bearish | -0.2% | Miss |
| Gold | Weak Bullish | -2.0% | Miss |
| Brent | Weak Bearish | +0.4% | Miss |
Gold was the miss that taught the most. We read the Middle East haven bid as the driver and called it up, but the post-Fed jump in the dollar and real yields overpowered it and gold fell -2.0%.
Geopolitical Spotlight
The week’s biggest geopolitical story sat in the oil market. On the sidelines of the UN General Assembly, Iran offered to reopen the Strait of Hormuz within seven days if the US eased its naval blockade, lifted oil sanctions and held a ceasefire.
The US rejected the seven-day plan on Friday. That left traders pricing two outcomes at once: a thaw that frees tanker traffic, and a standoff that keeps the risk premium in place.
Crude split on the news. WTI fell -7.9% on the week to $92.41 as North American supply looked ample, while Brent held far better, near flat at $104.32, because Middle East cargoes still face the strait.
The knock-on ran into rates and the dollar. Cheaper US crude eased some inflation worry, but firm data and hawkish Fed talk kept yields climbing and the dollar bid.
The desk at City Traders Imperium is watching tanker traffic through Hormuz for the next real signal.
Oil sets the tone for inflation and the dollar into next week. A revived Hormuz deal would let Brent slide toward WTI and take some heat out of yields.
A fresh breakdown would rebuild the premium fast. Watch Brent around $100, the line between a calmer tape and another supply scare.
Forex Markets
The dollar beat all seven majors this week. Hawkish Fed remarks and the jump in Treasury yields drove DXY to 101.03, a second straight weekly gain.
EUR/USD slid -0.9% to 1.1382, its weakest since July, with the European Central Bank quiet on the week.
GBP/USD was the standout loser among the majors, down -1.3% to 1.3219 and near a three-month low. Traders doubted the Bank of England would match the Fed after it held at 3.75% last week.
The yen kept sliding. USD/JPY rose +0.7% to 158.03 as the wide rate gap did the work.
AUD/USD fell -1.3% to 0.7026, the largest major decline, and NZD/USD lost -0.9% to 0.5665. USD/CHF rose to 0.8285, so the franc gave back -0.9%.
Currencies to Watch
AUD/USD. The Aussie was the week’s weakest major at 0.7026.
The Reserve Bank of Australia decides on Tuesday with a hike to 4.60% priced, and Australian CPI lands the next day. Watch 0.7000, a level that has held so far.
GBP/USD. Sterling sits near a three-month low at 1.3219 after the BoE held.
Governor Bailey speaks on Thursday. Watch whether 1.3200 gives way.
USD/JPY. The pair trades at 158.03, its highest in about four weeks.
It nears the 160 area that has drawn official attention before. Watch for any pushback from Tokyo as it climbs.
The dollar holds the upper hand while the Fed leans toward another hike and yields stay high. That leaves the euro, the pound and the antipodeans exposed if US data stays firm.
Friday’s US payrolls is the swing point for the whole complex. Watch DXY around 101, where a hold keeps the pressure on the majors.
Indices
US stocks split again this week. The gap ran between big tech and everything sensitive to rates.
The Nasdaq led, up +2.1% to 27,069 and back at record highs, as an AI rally around Meta pulled buyers in. The S&P 500 added +0.6% to 7,743.
The Dow Jones ended flat, off -0.2% to 51,829, as the surge in Treasury yields weighed on cyclical and rate-sensitive names. The 10-year yield hit 5.18%, its highest since the financial crisis.
Friday steadied the tape. Oil eased on the Iran headlines, which cooled the yield spike and let stocks close the week higher.
The mood stayed two-sided. With a further hike in play, buyers leaned on tech and stayed cautious elsewhere.
Equities hang on yields and the jobs report over the next two weeks. A soft payrolls print would let the 10-year slip and give the broad market room.
A hot one brings the next hike closer and pressures valuations. Watch the 10-year yield near 5.20%, the level setting the tone for the whole board.
Gold and Oil
Gold gave back ground. It fell -2.0% to $4,280 as the stronger dollar and the climb in real yields pulled at the haven bid.
The drop reads as a pullback, not a turn. The metal still sits well above where it started the year, and Middle East risk keeps a floor under it.
Oil told a split story. Brent held near flat at $104.32, while WTI dropped -7.9% to $92.41 as the Iran talks pointed to ampler North American supply.
The gap between the two grades is the Strait of Hormuz. Brent still carries the premium for cargoes that must pass through it, so it held above $100 even as WTI sank.
The link runs back to rates. Every dollar off crude eases inflation, which shapes the Fed, the dollar and gold in turn.
Crude drives both metals and bonds into next week. Progress on an Iran deal would let Brent fall toward WTI and take the haven bid out of gold.
A breakdown would rebuild the premium overnight. Watch gold around $4,250, the level that decides whether this is a pause or a deeper slide.
What happened this week
- The dollar rose against all seven majors as Treasury yields surged, with the 10-year at 5.18%.
- The Nasdaq hit record highs, up +2.1% on an AI-led rally, while the Dow ended flat.
- Gold fell -2.0% to $4,280 as the stronger dollar and higher real yields weighed.
- Iran offered to reopen the Strait of Hormuz within seven days, but the US rejected the plan.
- WTI dropped -7.9% to $92.41 while Brent held above $100 on Middle East supply risk.
What to watch next week
- Tuesday 29 September, 04:30 GMT (05:30 London): RBA decision, a hike to 4.60% priced.
- Wednesday 30 September, 01:30 GMT (02:30 London): Australian CPI, seen at 4.1% y/y.
- Wednesday 30 September, 12:30 GMT (13:30 London): US core PCE, the Fed’s preferred gauge, seen at 0.3% m/m.
- Thursday 1 October, 14:00 GMT (15:00 London): US ISM manufacturing PMI, seen at 55.0.
- Friday 2 October, 12:30 GMT (13:30 London): US non-farm payrolls, seen at 98K with unemployment at 4.1%.
For informational purposes only. Not financial advice.
