FED CONVENUE EMERGENCY MEETING FOR 18:00 (BRASILIA HOUR)

[Igor Pereira]

The Federal Reserve has just announced an extraordinary unscheduled meeting.

By Igor Pereira ExpertFX School

• Original Timetable: 4:00 PM ET

• Schedule of Brasilia: 18:00 (Today)

The Reason: Liquidity Crisis

The official agenda of the meeting is critical: address liquidity problems and discuss a potential money injection (cash injection) in the system.

ExpertFX Analysis: What Does It Mean?

As we warned in our previous analysis about the emptying of the Reverse Repo (RRP)The security mattress of the American financial system has dried up. The banking system is operating without shock absorbers, and the signs of stress in the bond market forced the Fed's hand.

What to expect at market opening (Asia/Sunday at night):

1. Dollar (DXY): It can suffer immediate high volatility. If the market interprets "money injection" as a new Quantitative Easing (money printing), the Dollar can devalue in the medium term.

2. Gold: Protection assets tend to suffer liquidity withdrawal shakeOut and then fire if Fed confirms that "it will turn on the printer" to save the banks. Gold is already in the historical maxims and that could be the final fuel.

3. Grants: Liquidity injection generally supports the stock market, avoiding an immediate crash.

Recommendation: Stay away from leveraged positions during the opening of Asia. The post-meeting announcement will bring extreme volatility.

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We're monitoring. Stay tuned at ExpertFX School.