MHMarkets：The Fed adjusts the BTFP interest rate, and the arbitrage space of financial institutions disappears.

On Thursday (January 25), the Fed announced on its official website on Wednesday that from now on, the adjusted BTFP interest rate will not be “lower than” the effective reserve balance interest rate on the day of loan disbursement. The regular bank financing plan of the Fed was launched to relieve the pressure of the financial system during the regional banking crisis caused by the explosion of Silicon Valley banks last year. It allows banks and credit cooperatives to borrow funds with a term of no more than one year by mortgaging US treasury bond bonds and institutional bonds at face value. Prior to the latest changes on Wednesday, the BTFP interest rate increased by 10 basis points to the one-year overnight index swap rate (OIS). According to Wednesday's quotation, the BTFP interest rate for that day is approximately 4.88%. In contrast, the reserve interest rate is currently around 5.4% - which typically moves in sync with the Fed's benchmark federal funds rate target. This means that financial institutions can enjoy risk-free arbitrage of over 50 basis points by borrowing funds through the BTFP program and placing them in reserve balances. After Wednesday's adjustment, the BTFP interest rate will be raised by at least 50 basis points, leaving no room for arbitrage. The US dollar index rebounded and rose after receiving support at the bottom yesterday, ultimately closing near the intraday median. At the opening of the Asian market today, the US dollar index slightly adjusted, with the current price around 103.36. After encountering resistance from above yesterday, the market price of gold quickly fell and continuously broke through multiple support levels, ultimately closing near the intraday low. At the opening of the Asian market today, gold was slightly adjusted and consolidated, with the current price around 2015.27. After receiving support at the bottom yesterday, the market price of US crude oil accelerated and broke through the previously formed resistance level. At the opening of the Asian market today, US crude oil rebounded and consolidated, with the current price around 75.41. After receiving support at the bottom yesterday, EURUSD accelerated its rise and broke through the resistance level it had previously formed, ultimately closing near the intraday median. At the opening of the Asian market today, EURUSD made a slight adjustment, with the current price around 1.0879. USDJPY fell significantly yesterday due to the impact of the US dollar's fundamental expectations, and ultimately closed near the intraday median. At the opening of the Asian market today, USDJPY slightly consolidated and rose, with the current price around 147.82.

MHMarkets strategy is only for reference and not for investment advice. Please carefully read the statement at the end of the text. The following strategy will be updated at 15:00 on January 25, Beijing time.