US TSYS/SUPPLY: Q2 Borrowing Requirements Eyed, Lower Cash = Lower Borrowing

For today's Treasury financing requirements (1500ET), MNI has pencilled in $800B marketable borrowing for Q1 2025 (Jan-Mar), vs the November refunding estimate of $823B. That includes maintaining the $850B end-Q1 TGA cash balance target signalled in the previous refunding.

• For Q2 (Apr-Jun) we get a forecast for the first time and opinions are mixed - MNI's $450B for marketable borrowing is a little on the high side of expectations,  which we've seen a central range of $100B - $500B depending on various assumptions about how Treasury sees the April tax take, QT, and end-quarter cash.  
• For example, Wrightson ICAP writes that "we think the Treasury could lower its quarter-end cash balance objective to $500 billion or so without running undue operational risks, but we have no idea whether the new team at Treasury will share that view", and instead have likewise pencilled in a $850B TGA cash balance at end-quarters. And they write that their borrowing requirement estimates of "$820 billion for Q1 and $275 billion for Q2.  If the Treasury announces lower TGA estimates, we would reduce our borrowing estimates for the first two quarters of the year on a dollar-for-dollar basis"
• Unless well outside this range of expectations, this is unlikely to be a market mover in and of itself, but we will be paying attention to the interplay between cash assumptions, QT, and the marketable borrowing requirement.