MNI UST Issuance Deep Dive: Feb 2024 - Refunding Preview

EXECUTIVE SUMMARY:

• Treasury’s Quarterly Refunding process for the Feb-Apr quarter begins with borrowing estimates released on Mon Jan 29 (0830ET), followed by the refunding announcement itself on Wed Jan 31 (also 0830ET).
• As we noted in our mini-preview earlier in January, there will be three key elements to watch in the refunding announcement itself: the main thing will be the projected increases in Treasury coupon sizes, but also worth noting are the guidance for future quarters, and the (likely) announcement of a buyback program. We elaborate on those in this preview, in addition to the outlook for Monday’s borrowing estimates.
• Virtually all analysts whose previews we have seen expect a similar increase across coupon sizes as seen in the November round, though there are some variations.
• While aggregate nominal coupon amounts wouldn't quite reach the 2021 monthly highs ($336B), the next quarter would mark new records for sizes in the 2Y, 5Y, and 10Y and equal it for the 3Y.
• There is some near-term uncertainty over the borrowing requirements generated by multiple factors including Fed QT.
• This preview includes noteworthy observations from 14 analyst refunding previews.

Please see PDF for full analysis:

MNI_US_DeepDive_Issuance_2024_FebruaryRefunding.pdf