Liquidity Drain May Signal Further Trouble For Risk Assets

Liquidity continues to be drained from the system, primarily through Treasury issuance and rising TGA balances, putting pressure on risk assets.

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Liquidity continues to be drained from the system, primarily through Treasury issuance and rising TGA balances, putting pressure on risk assets. Bitcoin and other liquidity-sensitive assets are signaling stress, and historically, they tend to lead broader equity markets lower. Market structure looks increasingly fragile, with leverage, options, and ETFs amplifying moves and raising the risk of cascading declines. Silver's implied volatility hit wild levels.
 

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