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The U.S. Treasury said Wednesday it would gradually increase nominal coupon auction sizes in February, March, and April, matching market consensus expectations. The agency flagged expectations it will not need any further increases beyond those announced today for "at least the next several quarters."
The department will issue USD121 billion of securities at next week's refunding, raising USD15.9 billion in new cash. Officials plan to sell USD54 billion in 3-year notes on February 6, USD42 billion in 10-year notes on February 7, and USD25 billion in 30-year bonds on February 8. The agency said it is "well positioned to address potential changes to the fiscal outlook and to the pace and duration of future SOMA redemptions."
Treasury expects to maintain bill auction sizes at current levels into late March and anticipates by late-March or early-April making modest reductions to short-dated bill auctions going into the tax filing season. The agency is still evaluating whether to change the 6-week CMB to benchmark status and will announce a decision at the next refunding, a statement said.
The agency said it intends to announce the date of the first regular buyback operation at the May refunding and for it to begin "later this year". In preparation, Treasury anticipates conducting tests in April.
Anticipated Auction Sizes (billions USD):
Source: Treasury Department
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.