As previously discussed, whether the U.S. government reopens is a key variable affecting Q4 market performance.

However, this variable is becoming increasingly less important. The government reopening is happening too late—approaching December. With the year-end and quarter-end overlapping, liquidity will become tight even if the government reopens.

It would be better to focus on the next major event impacting liquidity: the Federal Reserve easing the Enhanced Supplementary Leverage Ratio and restarting balance sheet expanding.

The market originally expected the eSLR relaxation to take effect on January 1, 2026, but there are now signs of an earlier implementation.

Moreover, based on recent remarks from Fed Governor Williams, the market widely believes that the Fed will restart balance sheet expanding in the first quarter of 2026.