Coronavirus-induced market mayhem has pushed so much liquidity out of U.S. Treasuries that the true value of more than $50 trillion in assets around the globe is in doubt. Yields in the world’s largest debt market have been on a mind-bending, three-week roller-coaster ride. This volatility is happening
as trading-platform order books thin out to a degree last seen during the 2008 financial crisis, making it harder to use Treasuries as a gauge of investor anxiety. (Bloomberg Markets | Mar 12)
In the third upsizing of its repo schedule this week, the Federal Reserve ramped up the amount of cash it’s prepared to inject into funding markets over the next month, promising a cumulative total above $5 trillion, in a signal that officials will do whatever it takes to keep short-term financing rates from spiking. (BNN Bloomberg | Mar 12)
Sharp stock moves are punctuating the final minutes of the trading day, exacerbating what has already been
one of the rockiest stretches
of the past decade for financial markets. Major U.S. stock indexes peaked in mid-February and have since dropped at least 19%, with t
he
Dow Jones Industrial Average
entering a b
ear market, reflecting worries that the coronavirus epidemic will halt growth and eventually
tip the economy into a recession
.
(The Wall Street Journal | Mar 11)
Whether trader or investor, analyst or observer, Monday in markets looks like one to tell the grandchildren about. An oil price war has broken out in the middle of a worsening global virus outbreak, and it has triggered asset moves around the world that in some cases have never been seen before. Crude itself at one point dropped by a third. Treasury yields fell to unprecedented levels across the curve. U.S. stocks dropped so swiftly trading was halted. (Bloomberg Markets | Mar 9)
Brokerages in the U.S. are getting a break from their main regulator as the spreading coronavirus poses major compliance headaches across Wall Street. The Financial Industry Regulatory Authority said Monday that it would give firms more flexibility in supervising employees working remotely and in relocating personnel to temporary locations. The industry-backed regulator also said it would consider granting extensions for firms that need more time to respond to inquiries, filing deadlines or investigations. (Bloomberg Markets | Mar 9)