Morning 3-20

A Few things:
City Of Chicago going to announce some type of Shelter in place later this afternoon
Quadruple witching today


Crude Oil was up over 24% yesterday, the largest one-day gain in history due to the EIA buying Crude for Storage in SPR,Texas hinting at cutting production and president trump saying he Could/will ask Saudi Arabi to trim production


Fed balance sheet moves up to $4.668 trillion, a new high. In the last week it increased $356 billion, the largest weekly increase ever (prior record was $292 billion from Sep 24-Oct 1 in 2008 (Mizuho)
Bitcoin up 26% in last two days


Bond funds had a record week with net $108.9b outflows and net $20.7b leaving equity funds, while cash funds had $95.7b inflows, per EPFR Global data for week through March 18(mizuho)


Investment-grade bond fund outflows were the largest ever at $55.3b; high-yield bond fund outflows were the largest on record at $11.9b; EM bond fund outflows were also the biggest ever at $18.8b; government/Treasury fund inflows were $0.2b (panic in All areas of bond World)

A record $249 billion poured into U.S. government money-market funds over the past week. Total assets rose to an all-time high of $3.09 trillion in the week ended March 18, according to Investment Company Institute data that stretches back to 2007.(Mizuho)


The prior weekly inflows record of $176 billion was set in September 2008 during the financial crisis caused by the collapse of Lehman Brothers.
Prime money-market funds, which tend to invest in higher-risk assets such as commercial paper, saw outflows of $85.4 billion, the largest move since October 2016, according to ICI. Total assets fell to $713 billion.(Mizuho)


Investors pulled a record $12.2 billion out of municipal-bond mutual funds in the week ended Wednesday on concern about the widening impact of the coronavirus pandemic, almost three times larger than the previous record. . Investors also yanked a record $5.3 billion out of high-yield municipal bond funds, which hold securities most at risk from a worsening economy. Last week, those funds lost $1.7 billion (Mizuho) Muni bond yields are skyrocketing this week as the fiscal pain that is expected to come likely unprecedented.

U.S. Jobless Claims Could Exceed 2 Million, Goldman Says, for a point of reference Yesterday number was 280k(BBG) Yikes!

Markets:
Central bank trade today Stocks and bonds higher and most importantly Dollar lower
Libor A bit tame today as is the Fra-Ois Spread, the bank credit spread, a positive sign for both Stocks and Bonds. Tighter credit spreads =Higher bonds and Stocks


Dollar down 100 ticks indicating dollar strains abating a bit as Cross currency basis levels improve


Soy and Corn Continue to be bid as Rumors of China Demand and of Port closures in Argentina and brazil leaving the U.S. as sole Exporter
Cattle continue to rally benefiting from almost unprecedented near term demand as people stock up on beef.


Watch the QE schedule today Holders of Bonds are less willing to sell back to fed thus prices rally during the Auction process as Fed has to make bids attractive.

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