Syz the moment

After months of draining liquidity and a one-month delay that tightened markets, the Fed’s quantitative tightening officially ends today. Here’s what Wall Street is watching: 💧 Reserves Are Scraping Bottom Fed reserves hit a low in October, but should end 2025 around $2.9T - still uncomfortably close to “not enough.” Repo markets have already shown stress, with Standing Repo Facility usage hitting its 2nd-highest level since COVID. 🏦 Goldman’s Call: QT Ends, Balance Sheet Growth Returns Fast Goldman expects the Fed to start buying ~$20B/month in T-bills starting Jan 2026, plus reinvesting MBS runoff - together adding ~$40B/month back into the system. Reserves could climb back above $3T by late 2026. 💣 Why the Pivot? Liquidity Is Too Tight Repo rates (TGCR, SOFR) are trading well above where they “should” be. Funding markets keep flashing red. The Fed is quietly preparing to reflood the pipes. 📈 Treasury Supply Stays Heavy - But the Fed Becomes a Buyer Again With massive deficits ahead, Treasury issuance remains huge. But thanks to the shift in policy: Fed is expected to absorb ~$480B of next year’s T-bill issuance Non-Fed buyers only take ~$390B — the lowest since 2023 🍃 But There’s a Catch… The Fed will let $2T of MBS roll off, pushing a wave of mortgage-backed supply into markets. That means: ➡️ More pressure on housing and mortgage rates ➡️ A slow-motion shift from MBS → Treasuries in the system ⚠️ Bottom Line: QT ends today, but the liquidity story is far from over. Funding markets are strained, repo is volatile, MBS supply is surging - and the Fed may be forced to restart balance sheet expansion faster than anyone expected. The next big test? April tax season. If liquidity cracks again, the Fed’s “reserve management purchases” may turn into something much bigger. Source: Goldman Sachs, zerohedge

* NEGATIVE (!) since Nov 12 * Lowest NAV since Mar 27, 2023 (SVB failure) * It reached -50.92% on May 12, 2022 (Terra/Luna collapse) * Consistently negative for 18 months (Jan 22 to Aug 23) The peak of 229% on November 20, 2024... this was the height of BTC excitement over Trump's win.

Services weakened as the boost from earlier holidays faded, according to official data released Sunday. The manufacturing purchasing managers’ index rose to 49.2, up 0.2 points from October, the National Bureau of Statistics said. The figures were in line with economists’ expectations in a Reuters poll, but remained below the 50-point mark that separates expansion from contraction. The non-manufacturing business activity index fell to 49.5, down 0.6 points from October, while the composite PMI output index eased to 49.7, indicating a slight pullback in both manufacturing and services activities. Supply and demand in manufacturing improved modestly, said Huo Lihui, chief statistician at the bureau’s Service Industry Survey Center, with the production index reaching the 50 threshold and new orders rising to 49.2. Source: CNBC

Source: Barchart

A ris-off signal to start December? Well, it seems that the spike in Japanese bonds yields is the culprit... Indeed, Japanese bonds are puking on renewed expectations of rate hike, as the 2Yr JGB yield is above 1% for the first time since 2008. The yen is firming and the Nikkei 225 index is tumbling. And since nowadays Bitcoin always correlates with anything that's down, we have a 5% dump in Bitcoin in Asian trading to $85k.... In the middle of Asian session, BoJ Governor Ueda said he was consider the "pros and cons" of raising interest rates at the BoJ's December and idea that the market got hold of last week as the odds of a BoJ Dec rate hike increased from 30% to 50%. Source: Bloomberg, zerohedge

Private investors outside the US purchased a record +$646.8 billion of US equities in the 12 months ending in September 2025. Purchases have doubled since the start of the year. This is now 66% ABOVE the+$390.0 billion high seen in 2021. Meanwhile, foreign private-investor purchases of US Treasuries were +$492.7 billion during the same period. Rolling 12-month non-US buying of Treasuries has remained above +$400 billion for 4 straight years. Source: The Kobeissi Letter

For years, they've been pulling money out of the system Tomorrow, that drain stops... Source: @PaulGoldEagle

🚨🚨 Ouch!! Source: FT