Goldman Lifts Tsy Issuance Exp. On Fiscal Backdrop

Goldman Sachs expect "~$1tn in additional fiscal support for the
remainder of '20. This translates to larger Tsy issuance. Our deficit
estimates for FY21 and beyond have also been revised higher. For the
August refunding cycle, we expect monthly increases of $2bn in 2-, 3-, 5-
and 7-year auction sizes. Further out the curve, we expect a $3bn
increase to both the refunding and reopening auction sizes across each
of 10s, 20s, and 30s. On a net basis, we expect Treasury will be able to
raise $409bn, $37bn, and $68bn through nominal coupons, TIPS and
FRN issuance over the August-October period. For the full calendar year,
we project net issuance of $4.8tn, with nearly $3tn in bills, $1.6tn in
nominal coupons, $86bn in TIPS and $124bn in FRNs. The timing of
stimulus payments makes it likely that over $600bn of expenditures
slotted for FY2020 will actually be spent in 4Q20 (FY2021). As a result,
there is a strong possibility that 3Q20 cash balances remain elevated,
and well above Treasury's $800bn target for the remainder of this fiscal year."