Jefferies economist Tom Simons said...>

US TSYS/BILLS: Jefferies economist Tom Simons said today's $45B 04-week bill

auction "stopped at 1.240%, 0.5 bps short of where the WI was bid at 11:30AM and

6 bps higher than last week's stop. This is the highest yielding 4-week auction

since Sept. 5th, 2017. Prior to that, yields were last at these levels in

early-September 2008."

- He adds that the auction size is "$10 bln larger than last week and Thursday's

settlement will generate a $7 bln increase in total bill supply. Now that the

debt ceiling suspension period is over, Treasury can use some of the

extraordinary measures to free up borrowing authority and increase bill supply,

but they will likely be gradual in their approach to doing so."

- Simons said "the 3.09 bid/cover is at the low end of the recent range" while

"indirects were on the soft side with a 32.3% takedown. This is not terribly

surprising since the FOMC meeting is tomorrow and many investors have late-week

maturities stacked up to take advantage of higher yields post-hike."