A $90 Billion Liquidity Storm May Hit Markets This Week

Treasury bill issuance surges to $90 billion this week, intensifying the ongoing liquidity drain and pressuring risk assets. Markets, especially the NASDAQ and SMH, have historically underperformed on T-bill settlement days, with increased volatility observed.

The liquidity drain is more pronounced post-reverse repurchase facility depletion, forcing T-bill funding from broader markets. Heavy T-bill issuance is expected through August, with potential relief and liquidity add-back around the September 15 tax date.