Back to collectionTreasury Cash Falls as Risk Assets Weaken and Pressure Reaches 65
Net liquidity rose with lower Treasury cash, while credit spreads, equity drawdowns and VIX moved in a more defensive direction.
Liquidity pressure edged from 64 to 65, still neutral. Net dollar liquidity rose from $5.705 trillion to $5.810 trillion as Treasury cash fell from $1.040236 trillion to $0.930757 trillion and reverse repos fell from $4.375 billion to $0.427 billion. SOFR’s spread over IORB widened from 4 to 5 basis points, high-yield spreads from 326 to 343 basis points, while the 10-year real yield slipped from 2.63% to 2.62%. The Treasury’s November 2 estimate of $618 billion in October–December private net marketable borrowing is context, not proof that it caused these moves.
Risk assets weakened across the comparison window. The S&P 500 fell from 7,580.07 to 7,541.40, the Nasdaq-100 from 28,384.85 to 27,989.82 and the semiconductor index from 10,688.80 to 10,328.33; their drawdowns deepened to 3.55%, 10.36% and 29.43%. VIX rose from 19.42 to 21.15. XAI spot fell from $0.00709 to $0.00680 as volume rose from $86,411.50 to $104,955.80 and open interest fell from $1,378,235.80 to $1,286,115.60. Holders rose by 23 and the pre-mark figure by 0.004397 million XAI. These observations have different dates and show co-movement, not causation.