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The Clarity Act failed to secure enough votes in the US Senate on Tuesday, realistically stalling the bill for the remainder of the year. Not a single democrat voted in favour, leaving the motion with only 50 votes in total, short of the 60 required for cloture; 3 republicans also voted against. While the result is obviously disappointing for everyone in the cryptocurrency sphere, markets were never particularly optimistic regarding yesterday’s vote. Over the last couple of months, the Clarity Act had been subjected to a myriad of amendments and concessions aimed at appeasing the Democrat party, bumping the bill up to 635 pages in length, but in the end such efforts were in vain. The bill is by no means dead, but there are now only seven weeks left until the November mid-term elections, which will inevitably stall any progress on the Senate floor. Time constraints aside, the bill will need to show at least some signs of bipartisan reconciliation if anything is to happen before the end of the year; so far, half the US government simply isn’t interested. Another option is that the SEC and CFTC will forge ahead with their own ruleset, bypassing Congress entirely. A lot of work has already been done in this regard, in the form of the SEC’s Regulation Crypto Assets proposal, currently open for public comment until the 20th of October. All things considered, Bitcoin absorbed the bad news with some degree of composure, closing the day a mere 3% in the red and falling down to the $75k range – barely a scratch in crypto terms. The bigger loses were to be found in crypto stocks, such as Coinbase (COIN) and Circle (CRCL), which fell 10% and 11% respectively following the vote. The lack of progress on the regulation front will undoubtedly hurt the business models of both companies, particularly when it comes to stablecoins and yield-offering services. With the Clarity Act vote out of the way, attentions will turn to the FOMC meeting later today. A rate hike is all but confirmed at this point, with interest rate traders pointing to a 92% chance of a 25-bps adjustment to the upside. The US dollar reflected the relative certainty of the prediction, moving against the majors and driving the DXY up to 99.6 points by the end of the session on Tuesday. One decision that may not be so set in stone is the one resting with the Bank of England. Up until the start of the week, markets were confident that the Monetary Policy Committee would hold rates on the pound steady at 3.75%, but recent bond market turbulence has challenged this assumption. Yields on the 10-year gilt hit 5.4% on Tuesday, while those on the 30-year gravitated uncomfortably close to 6%. Talk at the water cooler is that the BoE will also slow down its bond-selling programme, thereby reducing sell-side pressure and giving a chance for yields to settle. A major factor in rising bond yields, not just in the UK but around the world, is the expectation of higher inflation due to the rise in crude oil prices, which remain at $108 per barrel for Brent Crude. Interestingly, the Shanghai Crude benchmark reached RMB 929.4 ($138.50) yesterday, an all-time record high since the futures contracts launched back in 2018. Very little good news coming out of the Middle East so far this week, particularly in Saudi Arabia, where the state oil company continues to battle to reopen vital pipelines following a wave of Houthi attacks. #CLARITY #BTC #CRYPTO About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.

A number of headlines have recently appeared making strong claims about the North Korean economy. According to some reports, the isolated dictatorship is undergoing a full-blown economic miracle, complete with record-shattering growth and LED-clad skyscrapers popping out of the Pyongyang urban landscape. What is Kim Jong Un up to? To save the reader some time, these headlines are completely misleading. The beleaguered country is still ridiculously poor, the economic growth observed over the last few years is almost entirely artificial, and anyone saying that the recent bump proves anything should be ignored. First things first, let us look at the actual growth figures. North Korea does not publish official economic statistics, leaving us to rely on models from the likes of the International Monetary Fund and South Korea’s Central Bank. According to those estimates, the North Korean economy grew by 3.5% in 2025, marking the third consecutive year of growth above 3%. While not terrible, the 3.5% figure is only noteworthy because it comes from a nation more commonly associated with forced labour camps and breadlines than economic prosperity. Cambodia has a similar sized economy, and it grew by 6.1% over the same time frame. To put the figure into more perspective, the United States grew at an annualised rate of 2.2% in 2025, a year during which the government was completely shut down for a month and a half. China grew 5% over the same period. 3.5% GDP growth is hardly an impressive statistic to begin with, but it becomes even harder to defend when considering that the North Korean economy is only now matching the same level it reached back in 2017, following heavy sanctions and border closures during the COVID years. Either way, it is worth looking at whether the recent growth spurt is merely a passing phase or whether it has any legs to it. The main driver behind the economic turnaround is in fact the Russia-Ukraine war. North Korea has effectively turned its entire manufacturing base into a giant ammunition production line, churning out millions of artillery rounds and scores of ballistic missiles to fuel wartime efforts on Russia’s western border. According to some estimates, weapon sales to Moscow amounted to almost $15 billion between 2022 and 2025. To put the above figure into perspective, North Korea’s GDP currently sits at around $30 billion, according to the kinder approximations, meaning ammunition sales alone account for a huge part of the recent surge in economic output. $3-4 billion per year may not seem like much on a national scale, but for a completely closed country such as North Korea, the figure represents a phenomenal windfall. Beyond artillery shells, North Korea is also providing Russia with infantry reinforcements, to the tune of tens of thousands of troops thus far. The harsh dictatorship is acting more like a private military company than a martial ally in this regard, renting soldiers to Russia for a monthly fee of around $2,000 to $3,000. The arrangement has also extended to labourers, farmhands, loggers and factory workers, all of whom work long hours and surrender most of their pay directly to the North Korean state. As rough as this sounds, such jobs are highly sought after because they provide better financial rewards than those available back home. The economic boon to North Korea involves more than simple cash payments, extending to food, energy, technology and infrastructure improvements, including the first road bridge connecting the two countries. Interestingly, the rapprochement with Russia has given the North Korean leader additional leverage against China. Historically, Beijing had de facto veto power over Pyongyang, but now that Russia is financing a third of the North Korean economy, this power balance has dramatically shifted. With that said, China remains the primary lifeline to the isolated northern state, accounting for the vast majority of its global trade, which has seen a sharp rebound following the termination of COVID lockdown measures. Cheap labour is once again a major part of the deal, but increasingly, mineral exports are contributing to the picture in an effort to make up for shortfall currently affecting the ravenous Chinese industrial sector. The problem with the sudden influx of cash is that it is being disproportionally deployed to the state capital. Tens of thousands of modern high-rise apartment blocks now adorn the Pyongyang skyline, prompting foreign visitors to coin the term ‘Pyonghattan’ to describe the burgeoning metropolis. Sarcasm aside, satellite imagery tells the same story. A comparison between now and ten years ago shows just how much more brightly the capital shines during the night hours. Unfortunately, the rest of the country remains almost totally submerged in darkness, betraying the centralised nature of development efforts. Kim Jong Un is on the case. In a bid to tackle the overlooked hinterlands, the Supreme Leader has embarked on an ambition plan to bring the provinces up to speed. The result is the 20x10 policy, a legal mandate to modernise 20 rural cities every year over a 10-year period. Leaning more on the pragmatic side, the measures focus on basic family homes, light industry and general service centres. The problem with such a top-down approach is that it is uprooting more natural systems and replacing them with heavily regulated state-run institutions. Rather than allowing people to trade freely, the government is muscling in on every private aspect of people’s lives. Results so far have been mixed. Embarking on massive public infrastructure projects is a great way to rapidly pump-up GDP figures; government spending is one of the four components of the ubiquitous metric, after all. Even building a road to the middle of nowhere can serve a purpose, as disingenuous as that purpose may be. North Korea is not the only country guilty of such practices. Large construction ventures are also very handy for propaganda objectives. North Korea is not alone in this regard either. Sadly, a good photo op does not feed a village, nor does it keep the lights on, as nighttime satellite imagery continues to demonstrate. Comparing North Korea with its southern neighbour reveals an even starker contrast. The difference in illumination is absolute; from high above the clouds, the border is easily identifiable by lighting alone. Given that South Korea’s economy dwarfs that of its northern counterpart by a conservative 50:1, despite having only double the population, this is unsurprising. That last statistic is the final nail in the coffin with regard to claims of North Korea’s miraculous economic growth. Wishing only the best for its people, the country itself offers little reason for hope.

There were no surprises on the American inflation front last week. Both the producer and consumer price indices fell almost dead in line with expectations, with the core component of the CPI edging marginally higher than anticipated month-over-month. The combined reports all but cement a rate hike on Wednesday. In what is likely to be a huge week for central banks around the world, the Federal Reserve, Bank of England and Bank of Japan are all scheduled to deliver their verdicts within a 48-hour period. FedWatch is now leaning towards a 90% chance of a 25-bps rate hike, which would push interest rates on the dollar to the 3.75-4.00% range. The Bank of England is not expected to budge on Thursday, and rates on the pound are likely to remain at 3.75% until November at the earliest, despite inflation rising to 2.9% in July. Finally, the Bank of Japan is forecast to raise rates on the yen on Friday morning, pushing the official target rate on the Japanese currency to 1.25%. Markets are generally confident enough in the above predictions that any deviation will cause significant movement on the affected pairs. Beyond the decisions themselves, the attached commentary will also play a part in interest rate forecasts over the rest of the year and into the next. According to reports emerging out of the City of London on Friday, the BoE could hike interest rates no fewer than four times in 2027 and may start doing so as early as November. Rate decisions aside, the rest of the economic calendar is relatively barren this week, while the earnings schedule is devoid of life entirely. The situation in the Middle East is as tumultuous as ever. While Iran and neighbouring countries continue to play a central role in the conflict, attentions are increasingly turning to Yemen and Saudi Arabia. The Houthi faction gained a significant foothold on the Red Sea last week, seizing strategically important coastal towns as well as Perim Island, which sits in the narrowest part of the Bab al-Mandab Strait. The additional rebel presence is bad news for international shipping companies seeking to transit the passage, putting further pressure on oil deliveries. To make matters worse, Saudi’s East-West pipeline was the victim of a drone strike last Thursday and has since been shut down. Crude oil prices underwent a moderate correction on Friday following the stretch to $110 the day prior, but Brent Crude is back on the front foot as of this morning, opening the week at $107 per barrel. Given the scale of the problem, market participants could be forgiven for wondering why oil prices are not higher still. The International Energy Agency may have an answer. According to the agency’s forecasts, the world is likely to see a drop in demand to the tune of 2.5 million barrels per day in 2026, exceeding previous estimates of 1.6 million BPD. A reduction in global demand, coupled with nations tapping into their accumulated strategic reserves, has so far kept something of a lid on oil prices, but said reserves can only endure for so long. The endlessly delayed Clarity Act will face a procedural vote on Tuesday, in what is looking like a do-or-die moment for the beleaguered bill. Senate Republicans released a new version of the legislation just last week, meaning the bill is still being worked on ahead of this week’s vote. The Clarity Act will need to secure 60 votes tomorrow, failing which, the odds of the bill passing this year will realistically drop to zero. Republicans currently hold 53 seats, requiring a sizeable contingent from the other side of the aisle to cross over. Prediction markets are not optimistic, with Polymarket advertising a mere 26% chance of the bill being enshrined into US law this year. A surprise ‘yes’ vote on Tuesday could provide some serious momentum to cryptocurrency prices. #CLARITYACT #REDSEA #FED About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.

You pull up the Alligator Indicator on your trading platform and see three coloured lines twisting together before suddenly spreading apart. Is that the signal to enter, or is it better to wait? Perhaps you have already followed the familiar advice to trade when the lines separate, only to watch the market fold back immediately after you opened the position. This guide explains what the Jaw, Teeth and Lips represent, how to recognise the indicator’s three distinct states, and which settings to use across different timeframes. We will also work through the entry and exit process step by step, using clear conditions you can check directly against your own forex chart. The Alligator Indicator consists of three smoothed moving averages known as the Jaw, Teeth and Lips, with each line representing the trend over a different period. Intertwined lines indicate a ranging market where entries are generally best avoided, while lines fanning out in the correct sequence suggest an established trend, but the real signal depends on both their order and distance, not simply whether they have separated. Open your trading account today with Radex Markets. The Williams Alligator Indicator is a technical indicator made up of three smoothed moving averages, with each one representing a different layer of the market trend. Introduced by trader and author Bill Williams in 1995, it was designed to help distinguish trending conditions from periods when the market is moving sideways. These colours are the traditional defaults, although some trading platforms allow them to be changed. The forward displacement is deliberate: each line is plotted several bars ahead of its underlying calculation, so its position and arrangement help reveal the trend’s direction and strength. By comparing the order, spacing and slope of the three lines, traders can assess the market without relying on a separate numerical reading. A smoothed moving average differs from an ordinary moving average because its calculation gives more weight to the broader price history, creating a smoother line that filters out more short-term noise. The trade-off is that it reacts more slowly when the market changes direction. The Alligator Indicator calculation begins with the median price of each trading period rather than relying solely on its closing price. MEDIAN PRICE = (HIGH + LOW) / 2 This calculates the midpoint between the period’s highest and lowest prices. For the first bar, the smoothed moving average begins as a simple moving average: First bar (as a simple moving average, SMA): SUM1 = SUM (CLOSE, N) SMMA1 = SUM1/N These formulas add the closing prices across the selected number of periods and divide the result by that number to establish the first average. For every bar that follows, the calculation incorporates the previous smoothed value: Subsequent bars: PREVSUM = SMMA(i-1) × N SMMA(i) = (PREVSUM − SMMA(i-1) + CLOSE(i))/N This updates the average gradually by removing part of the previous value and adding the latest closing price, which produces a smoother line with less short-term noise. Where: The three Alligator lines apply the calculation to the median price using different periods and forward displacements: JAW = SMMA (MEDIAN PRICE, 13, 8) The Jaw calculates a 13-period smoothed moving average and shifts it eight bars forward. TEETH = SMMA (MEDIAN PRICE, 8, 5) The Teeth calculate an eight-period smoothed moving average and shift it five bars forward. LIPS = SMMA (MEDIAN PRICE, 5, 3) The Lips calculate a five-period smoothed moving average and shift it three bars forward. The shorter the period, the faster the line reacts to price. This is why the Lips respond to a new move first and the Jaw responds last, and that difference in speed creates the three market states we will examine next. The three Alligator Indicator states describe how the Jaw, Teeth and Lips behave as the market moves between ranging and trending conditions. Each state has a chart condition that should be checked before deciding whether to wait, prepare or consider an entry. Reading condition: The three lines intertwine and cross each other, sit close together, and show no clear top-to-bottom order. The sleeping state means the market is ranging, with price moving backwards and forwards inside a relatively narrow area. Any potential entry during this stage depends on the boundaries of the range rather than the presence of an established trend. I have seen plenty of avoidable losses occur here because traders assume tightly grouped lines mean that a breakout is about to happen. A move may eventually develop, but the Alligator has not confirmed it yet, so entering at this point often means being caught by another turn inside the range. Reading condition: The three lines begin to separate out of their crossed state, but the order is not yet settled, and brief re-crosses can still occur. The waking state suggests that a trend may be forming, but its direction has not yet been properly confirmed. The Lips usually react first, followed by the Teeth and then the Jaw, although the lines may briefly cross again while the market decides where it wants to go. This is a stage for watching rather than immediately placing a trade. If the order of the lines keeps flipping, the direction remains uncertain, and treating every small separation as an entry signal is a reliable way to collect false starts. Reading condition: The three lines fan out in sequence, ordered Lips, Teeth, Jaw from top to bottom in an uptrend and the reverse in a downtrend, with price holding above or below all three lines. The eating state indicates that the trend is established. In an uptrend, price should remain above the three lines, with the Lips highest, the Teeth in the middle and the Jaw lowest. In a downtrend, price should stay below them, with the Jaw highest, followed by the Teeth and then the Lips. Two conditions must therefore be present at the same time: the lines must appear in the correct order, and price must be holding on the trend side of all three. Lines that have separated while price remains trapped between them do not qualify as a confirmed eating state. Trading with the Alligator Indicator requires more than waiting for three lines to move apart. A valid setup combines the correct line order, price position and a second form of confirmation before an order is placed. The first step is to confirm that the Alligator has entered its eating state. All three lines should be fanning out, pointing in the same direction and arranged in the correct sequence described in the previous section. For a long trade, the Lips should be above the Teeth, with the Teeth above the Jaw. For a short trade, that order should be reversed. If the lines continue to swap positions, the Alligator is still waking up, and the trend has not been confirmed. The second step is to confirm that price has moved beyond all three lines in the direction of the potential trade. A long setup requires price to hold above the Lips, Teeth and Jaw, while a short setup requires it to remain below them. The line order and price position must be present at the same time. Entering while candles are still closing between the lines is one of the most common ways to jump the gun and become trapped in an uncertain market. The third step is to place the stop-loss on the far side of the Jaw. As the slowest line, the Jaw represents the broader trend and provides a more meaningful invalidation point than the faster Lips or Teeth. For a long position, the stop can be placed below the Jaw and the nearest relevant swing low. For a short position, it can sit above the Jaw and the nearest swing high. If price moves decisively through the Jaw, the original trend reading no longer holds, so the trade should not be left open simply in the hope that the market changes its mind. The fourth step is to confirm the setup using a momentum indicator or price action before placing the order. RSI holding above 50 can support a bullish setup, while a reading below 50 can support a bearish one. A strong candle close, breakout and retest, or clear sequence of higher highs and higher lows can provide additional evidence. Used alone, the Alligator Indicator tends to get chopped backwards and forwards during ranging markets. Its most useful role is therefore as a trend filter, not as a complete entry-and-exit system dressed up as three colourful lines. Worked EUR/USD Example Suppose EUR/USD is trading on the four-hour chart and has recently moved out of a sideways range. The Alligator lines now show the Lips above the Teeth and the Teeth above the Jaw, while each line is rising and spreading further apart. Price closes above all three lines at 1.0850, and RSI is above its 50 midline, supporting the bullish momentum. The Jaw is positioned at 1.0805, while the most recent swing low is slightly lower. A trader could therefore consider: This is an illustrative setup rather than a recommendation to trade at those prices. The position size would need to be calculated so that a 60-pip loss remained within the trader’s predetermined risk limit. If EUR/USD continues rising, the trade could be managed by trailing the stop below new swing lows or behind the rising Jaw. A candle closing decisively below the Jaw, followed by the lines beginning to contract or lose their bullish order, would provide a clear reason to exit. This gives the trader objective conditions for both entering and leaving the position rather than relying on instinct once money is at risk. Read more: What is RSI in forex? Meaning, formula and signals Alligator Indicator settings should reflect the speed of the chart being traded. The figures below are practical starting points rather than fixed rules, with the periods shown in Jaw/Teeth/Lips order. Using slow settings on a five-minute chart can cause the indicator to react after much of the move has already occurred. However, making the lines too sensitive produces frequent crossings and false eating states. On daily and weekly charts, moderately longer periods can filter out fluctuations that are insignificant within the wider trend. The standard 13/8/5 combination comes from the Fibonacci sequence rather than arbitrary selection, which is one reason it can filter noise effectively on four-hour and higher timeframes. Even so, no setting is automatically suitable for every currency pair, so any adjustment should be tested across trending and ranging conditions before it is used with real money. Read more: Trend Trading Strategies: How to Use Indicators with Examples The Alligator Indicator, a single moving average and MACD can all help traders analyse a trend, but they present the information differently. The best choice depends on whether the trader wants a simple directional filter, a momentum reading or a visual breakdown of the trend’s different layers. A single moving average operates at only one speed, so it cannot show how the short-, medium- and longer-term layers of a trend are interacting. MACD condenses the difference between two moving averages into lines and a histogram, making momentum easier to assess, but it does not show where price is sitting relative to those averages on the main chart. The Alligator displays the trend’s layers directly through the arrangement of the Jaw, Teeth and Lips. The trade-off is that the trader must monitor three lines, their order and the position of price, rather than having one number or histogram available at a glance. For this reason, the Alligator is particularly useful as a visual trend filter, while MACD may be the better choice when momentum is the main concern. Read more: The best forex indicators every trader should use in 2026 The Alligator Indicator is simple to add to a chart, but that does not mean every colourful rearrangement deserves a trade. Over the years, I have seen the same four mistakes appear repeatedly, and I have made some of them myself. None of these traps represents a fault in the indicator itself; each one comes from treating a single condition as though it were a complete trading signal. Read more: How to Read Forex Charts for Traders The Williams Alligator Indicator is not consistently profitable when used by itself, with cited back tests across thousands of trades producing win rates of approximately 28% to 45% and substantial drawdowns in ranging conditions. It is better used as a trend filter alongside a second confirmation tool, which is the approach described in Step 4 of this guide. There is no single most successful trading indicator because every tool performs differently as market conditions change. Volume is commonly used to confirm market participation, while RSI and moving averages help assess momentum and trend direction; the Alligator’s role within such a combination is to identify the market’s trend state and filter out ranging conditions. In macroeconomics, the “Big Three” economic indicators are gross domestic product (GDP), the unemployment rate and the inflation rate, commonly measured using the Consumer Price Index. These are macroeconomic measures of economic health, which places them in a different category from chart-based technical indicators such as the Williams Alligator. The most widely accepted Alligator Indicator settings are Bill Williams’ defaults: Jaw 13 with an eight-bar shift, Teeth 8 with a five-bar shift, and Lips 5 with a three-bar shift. These Fibonacci-based settings are particularly useful on four-hour, daily and higher timeframes, while shorter periods can improve reaction speed on lower timeframes at the cost of producing more false signals, as shown in the settings table above. The three lines are called the Jaw, Teeth and Lips, and each one is a smoothed moving average calculated over a different period. Together, their order and spacing reveal the short-, medium- and longer-term layers of the trend. The Alligator is sleeping when its three lines are intertwined, close together and repeatedly crossing. It is waking when they begin to separate, but a properly established trend requires them to fan out in sequence with price holding above or below all three lines. The Williams Alligator Indicator combines three smoothed moving averages, the Jaw, Teeth and Lips, each calculated with a different period and forward displacement. We have covered the formulas behind those lines, the chart conditions that define the sleeping, waking and eating states, and a four-step process for confirming entries, placing stops and managing exits. We have also examined how its settings can be adjusted by timeframe and how the indicator compares with a single moving average and MACD. The practical test to take to your own chart is straightforward: do not ask only whether the lines have separated; check whether they are in the correct order and whether price is holding beyond all three. From my experience, the Alligator is misused most often as a standalone entry signal when its proper role is to filter the trend before price action or a second indicator confirms the trade. Lee W. is a seasoned professional trader with over 10 years of experience. Passionate about sharing valuable expertise and unique market insights, Lee W. now serves as an external and independent market analyst for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.

The situation in the Middle East continues to worsen and crude oil prices continue to rise. Although an Iranian strike on a US military base in Jordan caused only limited damage, the boldness of the attack has raised the stakes of the ongoing conflict. Over in the Red Sea meanwhile, Houthis rebels have seized the port city of Mocha, which lies just 80 km north of the Bab el-Mandeb Strait, with dangerous consequences for shipping in and out of the vital chokepoint. The Brent Crude benchmark soared to $109 per barrel on Thursday, as the escalation in hostilities became impossible to ignore. While difficult, crude oil flows out of the region had persisted up until this point, albeit to a reduced extent, but yesterday’s events will inevitably throttle exports to a greater degree. The WTI benchmark also underwent a strong move on Thursday, melting straight through the three-figure mark to reach $104 per barrel. Higher oil prices mean higher inflation; higher inflation translates to a higher likelihood of central bank intervention. Next week is the big one in terms of interest rate decisions, with the Federal Reserve, Bank of England and Bank of Japan all chiming in with their respective decisions within a 48-hour period. As things stand, interest rate traders are pricing in a 70% chance of a rate hike on the USD next Wednesday, and markets are adjusting accordingly. The Dow Jones and S&P 500 both settled 0.6% lower yesterday, while the tech-heavy Nasdaq-100 tumbled over 1% over the prior daily close. Gold sank the better part of 2% over the course of the day, while silver crumbled 5.5%, as both precious metals hit multi-week lows. Cryptocurrencies had no sanctuary to offer, as Bitcoin fell around 1.4% to $77,000 per coin. Worth noting once again the relative strength of the fledgling asset class compared to the more established commodity markets. The US dollar gained marginally against the majors, although it too provided very little by way of safe haven. American producer prices rose 0.4% in August, falling exactly in line with predictions. The lack of surprise prompted very little reaction, particularly given the more impactful CPI release scheduled for publication later today. The headline inflation figure is expected to remain steady at 3.4% year-over-year, while the core component is expected to fall slightly to 2.4%. Should the actual reading come in much higher, it will be the final nail in the coffin as far as the Fed is concerned, dooming markets to a 25-bps hike next week. #IRAN #OIL #BRENT About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.

On Wednesday, Amazon launched its first ever sale of sterling-denominated bonds, raising over £4 billion in the process. The sale was conducted by a syndicate of four banks, comprising JPMorgan Chase, Barclays, HSBC and NatWest, and offered investors four different tranches of maturities ranging from 3 years to 19 years. Institutional appetite was fierce to say the least; although bond sales across the four tranches amounted to £4.25 billion, the offering was substantially oversubscribed, with the order book peaking at over £12 billion in total. Yesterday’s sterling-denominated issuance marks Amazon’s fourth non-USD debt offering of the year, following on from a record-breaking €14.5 billion Eurobond sale in March, a 2.8 billion Swiss Franc sale in May and a 10 billion Canadian dollar sale in June. Combined, the four bond sales raised the equivalent of $36 billion in foreign capital. In comparison, Amazon has raised an estimated $62 billion in USD-denominated debt so far this year, meaning over a third of the company’s total issuance in 2026 has been in foreign currencies. The sheer amounts of cash needed to build artificial intelligence infrastructure has forced Amazon into diversifying its investor base, expanding the ravenous search for cash beyond American borders. The company’s capital expenditures were reported to reach an estimated $220 billion this year and the vast majority of that is expected to be pumped straight into AI ventures. Amazon is not alone. Google is arguably the pioneer in foreign debt instruments, having conducted a sterling-denominated bond sale of its own back in February of this year. The sale raised £5.5 billion across 5 different tranches, including a stunning 100-year bond set to mature in 2126. Alphabet has in fact organised sales in a wide range of currencies, including the Euro, the Japanese yen, the Swiss Franc and the Canadian and Aussie dollars – the broadest footprint of any of the major tech companies. The scale of the capital being raised is now so immense that hyperscalers such as Amazon, Google and Microsoft are matching major institutions as the dominant issuers of high-quality debt instruments. This is causing some interesting side effects, both in the US and in Europe. The bonds being offered by massive American corporations are very attractive to European investors, who only have a limited amount of capital to allocate. Because of this, European corporate bonds are being crowded out of the market, forcing the companies that issue them to offer higher interest rates in order to compete with their American rivals. This, in turn, pushes up financing costs for local European corporations. It is a double blow. Firstly, European companies are forced into offering higher yields to attract investors; secondly, US companies are siphoning away the limited amount of European capital to fund their own ventures, which are sometimes in direct competition with their European counterparts. It is yet another financial wedge being hammered into the ever-widening tech gap. In the United States, the problem is completely different. Because the massive American hyperscalers are considered almost as safe as the US government itself, and because the yields on offer are more attractive, some asset managers are selling off US treasuries to free up capital to purchase corporate bonds from the likes of Google or Amazon. Investors can get an extra 0.8% yield on a 10-year corporate bond compared to a 10-year US treasury, with no additional perceived risk. More than forcing other companies to offer better interest rates in order to attract capital, the dynamic is forcing the Department of the Treasury itself to compete for cash. As an aside, this dynamic does not play out to the same extent in sovereign European debt markets because institutional investors face something called a ‘spread risk charge’, which legally requires them to lock up significant cash reserves when holding corporate bonds, to the tune of 8-9%. This requirement is responsible in no small part for preventing institutional firms from mass dumping European debt. Corporate bonds are more competition for the same pool of cash, and this extra competition is now so large that European companies and the US government are feeling the pressure. Alphabet, Amazon, Meta, Microsoft, Oracle and SpaceX accounted for $20 billion in corporate bond issuance in 2024; this year, the figure already stands at $180 billion. The insatiable appetite of artificial intelligence knows no bounds. About the Author Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment.