Oil entered this week at $91 per barrel after its strongest weekly gain since July, with WTI up nearly 9% as US-Iran hostilities resumed in the Strait of Hormuz. Then, on Saturday 5 September, the situation escalated further: US forces struck three Iranian oil tankers, including one near Kharg Island, Iran's primary crude export terminal, in what has been formalised as a tanker-for-tanker doctrine. Monday's open is live.
Layered on top of a military escalation is a Federal Reserve that is now genuinely divided. August nonfarm payrolls came in at 162,000 against a consensus near 53,000, the strongest monthly gain since March, pushing September rate hike probability to approximately 60%. The Bank of Japan is simultaneously signalling a 25bp hike on September 17-18 at 84% market-implied probability. This creates the most unusual week of the year: both the Fed and the BoJ potentially hiking within 72 hours of each other, with Thursday's US August CPI at 13:30 UK the number that decides whether the Fed delivers.
Gold sits near $4,429, silver near $67, and EUR/USD near 1.1620 entering the week. The ECB is expected to hike 25bp to 2.5% on Wednesday, providing a floor for the euro. USD/JPY has retreated from 160 to near 156 on BoJ repricing, and CHF institutional shorts remain at the 98th percentile of the 52-week range - a structurally dangerous position in a week of active geopolitical escalation.
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