August CPI printed Friday at +0.4% m/m and 3.4% y/y, matching consensus. Core CPI rose 0.3% m/m for a 2.4% annual rate — one tenth hotter than forecast. It followed Thursday's PPI at 5.4% y/y, where services alone contributed roughly 3.08 percentage points of the annual rate. This is the last major inflation read before the FOMC meets Tuesday and Wednesday with the funds rate at 3.50–3.75%.

Fed funds futures now put the odds of a 25bp hike at roughly 86–90%, with a follow-on October increase priced near 60%. That is the number to sit with: the market is pricing tightening, not easing, for the first time in this cycle. The 10-year Treasury touched 4.992% on Thursday — its highest since October 2023 — before settling near 4.93%. The 30-year sits around 5.36%, the highest since 2007.

Equities read the in-line print as relief. The S&P 500 closed +0.86% at 7,656.98, the Dow +0.98% at 52,573.29, the Nasdaq +0.96% at 26,333.04, snapping a four-session losing streak. The week was still red: S&P -0.8%, Dow -1.6%. WTI settled at $100.13, down 2.29%. Michigan sentiment came in at 47.8 with one-year inflation expectations at 4.6%.

Bitcoin traded near $77,269 early Saturday, up 0.6% on the day, with total crypto market cap at $2.73 trillion and BTC dominance at 56.8%. The price is stable. The flows are not.

US spot Bitcoin ETFs shed roughly $449.5 million across the three sessions through 10 September, including $282.7 million on Wednesday alone. ARK 21Shares' ARKB led with $164.3 million out, followed by GBTC at $38.4 million, FBTC at $33.6 million and IBIT at $24.5 million. Note the breadth — earlier outflow days concentrated in a single fund; this one was distributed. For context, these same products took in $3.52 billion in August, cutting year-to-date net outflows from $5.29 billion to $1.77 billion.

Friday's figures are worth flagging because the trackers disagree. SoSoValue recorded a $13.29 million net outflow for Bitcoin ETFs on 11 September, while Lookonchain's on-chain count showed 3,391 BTC (~$266.8 million) leaving. The gap is large enough that you should not build a thesis on either number in isolation. Technically, $76,500 has held as the demand floor since July; the 20-day EMA sits at $76,997 and the 200-day EMA at $72,896.

Nasdaq Ventures is investing $100 million in Payward, the parent of crypto exchange Kraken, at a reported $21 billion valuation. The deal expands a partnership first announced in March and centres on Nasdaq Equity Tokens (NETs) — tokenised representations of Nasdaq-listed shares that carry voting rights equivalent to the underlying stock. Launch is targeted for Q2 2027 on Payward's xStocks platform.

The commercial side matters more than the headline number. Payward will adopt Nasdaq's market surveillance technology across its entire stack — spot crypto, equities, tokenised equities, futures and options — making Kraken a paying Nasdaq customer as well as a portfolio company. Neither side disclosed the pricing of that contract.

Read it against the comparables. Deutsche Börse paid $200 million for roughly 1.5% of Payward in April, implying about $13.3 billion. ICE invested in OKX at $25 billion in March and took a board seat. The $21 billion mark on Kraken is a steep re-rate in five months. Underlying volume supports some of it: xStocks has cleared over $40 billion in cumulative trading with more than 200,000 holders in roughly a year, and tokenised equity market cap now exceeds $2 billion, up from $1.7 billion in June.

The European Central Bank raised all three policy rates by 25bp on Thursday. The deposit facility goes to 2.50%, main refinancing to 2.65% and marginal lending to 2.90%, effective 16 September. It is the second increase of 2026, following June's move to 2.25% and a July pause.

The driver is entirely energy. Euro-area headline inflation hit 3.3% in August, with the energy component running at 14.3% year-on-year, while core inflation actually fell to 2.4% from 2.5%. The ECB's own statement tied the decision directly to the Middle East conflict, projecting headline inflation to average 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028 — the 2027 and 2028 figures revised up from June. Growth forecasts went the other way, upgraded to 0.9% this year, 1.4% in 2027 and 1.5% in 2028.

The Governing Council gave no forward guidance, saying each decision will be data-dependent. Markets are pricing roughly a 90% chance of a third hike before year-end. For a bloc that imports most of its energy, hiking into an imported supply shock is a blunt tool — it does nothing to crude prices and everything to indebted households and SMEs.

Citadel Securities filed a comment letter on 9 September asking the SEC and CFTC to reaffirm SEC jurisdiction over event contracts tied to US public companies. Stephen Berger, the firm's global head of government and regulatory policy, argued that contracts referencing corporate key performance indicators — quarterly sales, passenger counts, production figures — are security-based swaps and belong under securities law.

The technical complaint is about process arbitrage. A CFTC-registered designated contract market can self-certify a new product and begin trading the next business day unless the agency intervenes. An SEC-regulated venue generally must publish its proposal, take public comment and obtain an affirmative approval order. Citadel's position is that a venue should not be able to select its regulator through its own characterisation of an instrument. It also asked the SEC to commit to faster product review, which addresses the obvious rebuttal.

The insider-trading angle is the sharpest part of the argument. KPI data flows through corporate reporting channels before reaching the public. Under SEC oversight, trading those instruments triggers the full insider-trading and disclosure regime; the CFTC framework is thinner. Citadel is a major market maker in the space, so the commercial interest is real — but the jurisdictional question stands on its own.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.