- 2 year auctions increase $3 billion/month
- 3 year auctions increase $2 billion/month
- 5 year auctions increase $3 billion/month
- 10 year auctions increase $2 billion/month
- 30 year auctions increase $1 billion/month
- Total coupon sizes at $112 billion vs $114 billion expected (up $9b q/q)
The Treasury said it expects one additional quarter of increased auction sizes beyond what’s announced today.
US 10-year yields intraday
Expectations I’ve seen:
- 2 year auctions expected to increase $3 billion/month
- 3 year auctions expected to increase $2 billion/month
- 5 year auctions expected to increase $3 billion/month
- 10 year auctions expected to increase $3 billion/month
- 30 year auctions expected to increase $2 billion/month
- Current portion of bills at 20.4%
Goldman Sachs though is much lower seeing:
- 2 year auctions expected to increase $2 billion/month
- 3 year auctions expected to increase $2 billion/month
- 5 year auctions expected to increase $2 billion/month
- 10 year auctions expected to increase $1 billion/month
- 30 year auctions expected to increase $1 billion/month
Overall, the market is focused on less issuance than feared at the long end along with some clarity that the Treasury only plans to increase auction sizes once more.
There was more focus on this announcement than I’ve ever seen for Treasury refunding so we could see some angst come out of the market with long-dated yields falling on this.
Here’s the instant analysis from BMO: “Our
takeaway from the new information was that the reintroduction of term premium
into the long-end of the curve was enough to give Yellen pause in being too
aggressive with long-end issuance increases”