What is happening in the market? Why are cryptocurrencies, gold, U.S. stocks, A-shares, and H-shares all falling?
Nothing has fundamentally changed in the market; macroeconomic factors remain consistent. The trigger for the decline is the escalating U.S. government shutdown, which intensified on November 3rd and has now entered its 34th day, significantly impacting liquidity.
Liquidity indicators are flashing warning signs across the board today. Usage of the Federal Reserve's Standing Repo Facility (SRF) reached $14.75 billion yesterday, the second-highest level since the tool was established, following a record high of $50.35 billion last Friday. Meanwhile, the spread between SOFR and IORB reached a record +37 basis points.
The cash balance in the U.S. Treasury's TGA account has reached $1 trillion, compared to previous fluctuations around $300 billion. This implies that nearly $700 billion in liquidity has been withdrawn from the market.
This is the root cause of the current market liquidity crunch, but it can actually be resolved easily—by the government reopening, after which the Treasury Department would deplete $1 trillion from the TGA account, equivalent to injecting hundreds of billions of dollars in liquidity back into the market.
With this liquidity, market risk assets can quickly recover. To track the progress, simply monitor this indicator: the SOFR-IORB spread.
If the spread does not narrow quickly, it indicates the need for urgent repo operations and quantitative easing policies.
When will the government reopen? The betting market forecasts mid-November, specifically between November 10 and November 15.
Goldman Sachs expects the government to reopen within two weeks, at which point liquidity will recover, and assets...

Good day, hope everyone dong well