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Time to Buy Bitcoin as BoJ Promises ‘Ample Liquidity’ with Fed Expected to Cut Rate i

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Asian markets rebound after Bank of Japan pledged all-out efforts to ensure market stability
The WHO has raised the global risk for the new coronavirus from “high” to “very high”
Goldman Sachs’ economists expect the Fed to cut 100 basis points this year
Monday has started on a positive note as Asian markets come charging back after bank of Japan Governor Haruhiko Kuroda issue a statement that the central bank,

“WILL STRIVE TO PROVIDE AMPLE LIQUIDITY AND ENSURE STABILITY IN FINANCIAL MARKETS THROUGH APPROPRIATE MARKET OPERATIONS AND ASSET PURCHASES.”
As the coronavirus (Covid-19) spreads globally, the concerns of destabilized financial markets to negatively impact the economy have also risen.

As a result, for the first time since June 2016, the BOJ governor released such a statement. Kuroda also said the bank will use a gensaki arrangement, where the buyer promises to sell back the bonds after a specified period, to buy 500 billion yen worth of govt. bonds yet another first such operation since 2016.

Already, as part of its ultra-loose monetary policy, the BOJ has been buying JGBs at 80 trillion yen a year and ETFs at a pace of 6 trillion yen a year. Trader and economist Alex Kruger said,

BIG MEASURES ANNOUNCED WHILE TRADITIONAL MARKETS ARE CLOSED WOULD BE IDEAL FROM A TRADING STAND-POINT AS WOULD ALLOW BITCOIN TO *POSSIBLY* FRONT-RUN RISK ASSETS.
EMERGENCY CUTS ARE A GROWING POSSIBILITY. LAST TIME THIS HAPPENED WAS IN 2008.HTTPS://T.CO/YOYJAJ1WBT
— ALEX (@CLASSICMACRO) MARCH 1, 2020
Fed Expected to Cut 100 basis pts this year as Coronavirus Risk “Very High”

The Federal Reserve also promised to “act as appropriate” as investors looked to central banks for support amidst a $6 trillion market meltdown. Coronavirus, however, continues to grip world markets.

China’s factory activity plunged to record last month while Coronavirus cases topped 87,000 worldwide, with new infections and two deaths recorded in the US. The World Health Organization also raised the global risk for the new coronavirus from “high” to “very high” on Friday.

The 10-year bond yields dropped to a record low 1.1045% while CME Group’s futures suggests a 100% chance of March rate cut. As such US equity features suggest solid gains following the worst one-week decline since the global financial crisis.

However, US stock futures sank on Monday morning pointing to yet another brutal week on Wall Street.

If the market remains this bad, the rate cut could happen as soon as this Wednesday, March 4, noted Bill Nelson, the chief economist at the Bank Policy economist, a former Fed insider.

The last time the unscheduled rate cut happened was during the 2008 crisis. The next Federal Open Market Committee meeting is now on March 17 and 18.

Goldman Sach economist said on Sunday that they see the Fed cutting 100 basis points this year, up from 75 basis points on Friday. Alex Kruger said in a tweet,

IF THE FED IMPLEMENTS EMERGENCY CUTS, I’LL BE BUYING $BTC FOR A TRADE. UNCORRELATED, I KNOW. I DON’T CARE. IT IS EVIDENT $BTC HAS TRADED LIKE A RISK-ON ASSET IN THE LAST WEEK. WE ARE IN UNCHARTED WATERS. PAST CORRELATIONS DO NOT MATTER MUCH AT THE MOMENT. HTTPS://T.CO/GQCXLYDNPI
— ALEX (@CLASSICMACRO) MARCH 1, 2020
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