NatWest Markets analyst Blake......>

US TSYS/RESEARCH: NatWest Markets analyst Blake Gwinn eyed US debt limit

situation. "In a letter to Congress several weeks ago, Secretary Mnuchin wrote

that it was "critical" to increase the debt ceiling by Sept. 29th, 2017," he

said. "In the following wk, the Tsy's qrtrly refunding statement echoed this

timeline, stating that they "expect to be able to fund the government through

the end of September." 

- But Gwinn said "after updating our own forecasts" after recent July Monthly

Statement of Public Debt, "we are considerably more optimistic. While cash

balances may be uncomfortably low for Tsy in the first few weeks of September,

we expect an influx of cash around the Sept. 15th corporate tax date will help

carry Treasury through the end of October. Our best estimate is that the

so-called "drop-dead" date, when Treasury's cash balances are depleted,

extraordinary measures are exhausted, and they are unable to raise enough new

cash to meet their obligations, will come with the large beginning-of-the-month

payments on Nov. 1st. Of course, Tsy will be operating with a very small cash

cushion from here on out and small forecast misses can have a big impact."