Dealer Survey Portends Possible Aug Increase In Auction Sizes

Treasury has released its pre-August refunding survey of primary dealers (PDF here). The two main areas of interest are the survey questions at the end:

• The first is on upsizing auction sizes, possibly imminently:"The May refunding statement noted that based on projected intermediate- to long-term borrowing needs, Treasury may need to modestly increase coupon auction sizes later this year, potentially as soon as the August 2023 refunding announcement. Please discuss your expectations for future coupon auction size increases. How should nominal coupon increases be allocated across the curve? Should Treasury also consider increasing FRNs and/or TIPS issuance?"
• MNI's latest Treasury Deep Dive tentativelypencilled in an increase in auction sizes as soon as the August refunding window - this question will increase speculation that Treasury could indeed take such a step as soon as next month, vs consensus prior to the debt limit resolution that increases would wait until November.
• The second is on how Treasury should design the buyback program it surprisingly announced at the last refunding in May, eyeing "operational design parameters for buybacks under its cash management and liquidity support objectives:"
• The survey asks whether Treasury should exclude certain securities (including cheapest-to-deliver, if private outstanding is below a certain level), and what measures Treasury should use to evaluate offers submitted to a buyback operation.