The placement record over the 9 years the amount the plan will begin in the second half of October. Almost a quarter of the totals 114 billion dollars, the Treasury intends to collect the first two weeks, until October 31. In November, the volume of production will reach 243 billion dollars. The final quarter figure of 501 billion dollars — "simply breathtaking", says the analyst VTB24 Alexey Mikheyev: more for the quarter involved only in the 2009 financial year, during the crisis.
The result of these operations, would be "withdrawal from the market of huge volume of dollar liquidity," which will cause "an enormous increase in the dollar," says Mikheev.
The demand for the American currency will make the banks — primary dealers of the fed: they are the core customers, debt securities in the United States auctions, and also control 73% of the forex market.
"This is major banks such as Deutsche Bank Securities Inc., Citigroup, Goldman, Sachs & Co., Merrill Lynch, Morgan Stanley, UBS Securities, etc." — lists Mikheev.
While the market the opposite situation: the us Treasury is forced on a "debt diet" due to the current March of the limit on new loans. This puts pressure on the U.S. currency, says Mikheev: the dollar index fell to a 2-year low and the Euro has risen by 12% in six months.
In this mode, the markets will operate until mid-October, when the "ceiling" of U.S. debt should be raised (otherwise, the default), then the "appetite" of the U.S. Treasury will immediately become huge," says Mikheev.
The situation may exacerbate the reduction in the fed's balance sheet, the start of which the us Central Bank is expected to announce at the September meeting. These operations of the Federal reserve — essentially the beginning of a process of "reverse quantitative easing", says the analyst of "Abiliti Capital" Mikhail Fedorov.
For 7 years after the crisis 2008 year, the fed conducted emissions 3.5 trillion dollars, the money went for the purchase of assets from American banks, flooding the financial system with free money resources. Excess liquidity flowed into the markets, causing their rapid growth.
Now this process unfold in reverse, explains Fedorov: at the end of the year the fed will begin to extinguish Treasury bonds to $ 6 billion a month of mortgage — 4 billion each month increasing the total value of transactions, until it reaches 30, and $ 20 billion respectively. As a result, the dollar supply will be withdrawn from the system at the same time U.S. Treasury and fed.
The result of this "double impact" will be the growth rate of the American currency: the Euro by year-end will fall to parity with the dollar, losing 15% of its value, said Mikheyev.
"As for the ruble pairs, while the dollar-ruble marking around 60. The chances that will happen at least some growth of the ruble, at least to 59.50, before the expected drop in the ruble fall be reduced more. Even the growth of oil to the $ 53. per barrel of Brent has led to a drop in the dollar-ruble only to the level of 59.72. Accordingly, we believe that we must seize the moment for a coup from rubles into foreign currency in the coming days when the dollar will fall again to the lows on the forex," — said the expert.
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