Daily Treasury Statement Charts Update: 23/3/11
An update of the daily treasury statement charts:
The total operating balance of the US Treasury fell by around $8 billion yesterday (latest). As I have said in previous updates; the overall trend of the total operating balance remains downwards (at least for another week or two) due to the unwinding of the supplementary financing account.
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 the recent rally – market stress will be prevalent for the next 8-9 trading days. After that, there may be some upward movement.
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