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ZERO HEDGE: Why Are We Limit Up? Here’s A List Of All The Interventions Unveiled Overnight

Article by Tyler Durden in Zero Hedge

US equity futures are limit up this morning after an impressive rally from ugly depths during Asian trading overnight.

So, what, or who, is responsible for this massive comeback?

Admittedly – after the 5th worst daily drop in history of the S&P 500 – one might have expected a bounce…

But, as Nomura’s Charlie McElligott details below, there was an armada of stimulus plans suggested overnight to rescue the world (markets)…

As we have continued repeating, “The worse it gets, the larger the ultimate policy response” – and away we go, highlighted by German’s shock “fiscal” capitulation announcements happening real-time:

German FinMin Scholz unleashes the REAL bazooka today though, in a shocking FISCAL “whatever it takes” moment: *SCHOLZ SAYS POSSIBLE GERMANY WILL NEED TO TAKE ON ADDED DEBT*; GERMANY WILL HAVE NO LIMIT ON CREDIT PROGRAM FOR COMPANIES; SCHOLZ SAYS GERMANY WILL SPEND BILLIONS TO CUSHION ECONOMY; *GERMANY PLANS TO SET UP SAFETY NET FOR VIRUS-HIT COMPANIES; ALTMAIER: RESOURCES FOR GERMANY’S STATE BANK TO RISE TO 500BN

Treas Sec Mnuchin and House Dems reached an agreement last night to move forward with legislation that would shore up the US public health response to COVID-19, while also blunting some of the economic impact (h/t Rob Dent)

• Free COVID-19 testing, including for the uninsured
• Paid emergency leave for workers (14 days paid sick leave, up to three months paid family/medical leave)
• Enhanced unemployment insurance (increased access, waived requirements)
• Increased food assistance
• Increased federal funds for Medicaid

Yesterday’s Fed liquidity actions with the expansion of repo ops (beginning immed) and transition to “outright” QE (as previous “bill only” purchases expanded out across a range of maturities—thus, they are now explicitly buying Duration across nominal coupons, TIPS, FRNs and Bills) were introduced in an attempt to offset the obviously liquidity strains in the “frozen” Rates space, as evidenced by the moves in basis / off-the-runs this week

Further, given the deterioration of market conditions within Rates, I expect them to announce next week that they will effectively double the current monthly $notional purchases in an effort to soak-up some of this liquidity strain as OTR’s remain largely ‘bid-less’ and a large problem for both dealers and the leverage RV community alike

Lew’s new house-view is that the Fed will cut 100bps next wk, plus the aforementioned additional $50B of purchases on top of the current $60B plus the $20B from the MBS runoff reinvestments means a potential aggregate purchase of $130B / month from the Fed

To read this article in its entirety with charts in Zero Hedge, click here.

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Although the information in this commentary has been obtained from sources believed to be reliable, The Gold IRA Company does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. The Gold IRA Company will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.