The market was bathed in $56 billion of fresh cash this week from the Fed and Treasury. The Fed completed most of its mid month MBS settlements, with $21 billion settled and another $10 billion to settle on Monday. The Treasury paid down a net of $35 billion in outstanding bills as it faces a date with the debt ceiling and a possible government shutdown.
These trades put cash back into the accounts of dealers and other investors, triggering the rally early in the week. But the usual post FOMC Fed Resubstantiation rally was pre-empted by the time change of the announcement from its usual slot on Wednesday to Thursday. By late Thursday after the Treasury paydowns settled, the cash had been deployed. Friday, it was all over but for the shouting.
Here’s what we have to look forward to liquidity wise, next week, in October, and for the rest of 2015.
The monthly report for Treasury Investor Monthly subscribers is published around the the turn of the month. Please check back then.
Enter your email address in the form to receive email notification when Treasury Supply and Demand reports are posted. Select the reports for which you want to be notified from the list in the form.