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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.
MNI UST Issuance Deep Dive: June 2023
MNI UST Issuance Deep Dive: June 2023
Treasury Cash Rebuild To Have Sizeable Impact On Reserves
EXECUTIVE SUMMARY:
- Our monthly UST Issuance Deep Dive looks at measures Treasury will take to replenish its cash holdings post-debt limit crisis, and scenarios for the impact on overall liquidity in the US financial system.
- Treasury’s net debt issuance increase will be made up entirely of bills, and analyst expectations are that the total will run up to $800B-1T over the 4 months between June/Jul/Aug/Sep.
- The impact on the financial system will depend on the split in takeup of these bills, which will mostly derive from bank reserves and the Fed's overnight reverse repo facility.
- The rebuild of Treasury cash will have an impact similar to quantitative tightening, and It's not hard to see a situation in which bank reserves potentially become "scarce" as early as end-September.
- We look at sell-side analysts' varied expectations for the months ahead, and the possible fallout for liquidity, rates, and financial markets.
- We also review May's strong auction results, and provide our updated issuance calendar.
Please see PDF for full analysis:
MNI_US_DeepDive_Issuance_2023_06.pdf
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.
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