Daily Treasury Statement Charts Update: 21/3/11
An update of the daily treasury statement charts:
Tensions in the markets eased today, and ‘risk’ rallied strongly against fiat currencies. The daily treasury statement showed a $14 billion drop in the total operating balance. The overall trend of the total operating balance remains downwards (at least for another week or two).
In a peculiar and alchemistic fashion, the markets have corroborated the thesis that net US Treasury withdrawals are bullish for risk assets and net accumulations are bearish for risk assets (on a lagged basis). The charts of the lagged total operating balance vs current risk assets are posted below. They continue to suggest that – in spite of today’s rally – the market stress will be prevalent for the next 10-11 trading days. After that, there may be some upward movement.
Recommended: Charting the Federal Reserve's Assets - 1915 to 2012