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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.
US TSYS/SUPPLY
From our US Deep Dive out today: the upsizing expected for the next refunding round, consensus for the Feb-Apr quarter – as we ascertain it from year-ahead issuance previews by various analysts - is roughly as seen in the table below. This would mean a Feb refunding month total of $306B in coupons (up $30B from Nov), and $324B in May.
- Basically, most analysts expect a similar increase across coupon sizes as seen in the November round. Recall that at the November refunding, sizes were upped $3B for 2Y and 5Y, $2B for 3Y and 10Y, $1B for 7Y and 30Y, and no change to 20Y.
- Variations of this include slightly smaller upsizing for Feb-Apr, followed by an even smaller upsizing in the May round. In both variations, auction sizes reach roughly the same terminal level by the summer.
- In the following quarter (Feb-Apr 24) TBAC recommended similar increases to those they recommended in the Nov-Jan quarter (incl unch 20Y once again).
- The policy guidance could be important, given that Treasury delivered a surprise in November by stating it expected just “one additional quarter of increases to coupon auction sizes will likely be needed”.
- The key surprise this month would be if Treasury leaves open the potential for another quarter of increases in May-Jul.
$BSource: Feb-Jul = MNI based on consensus expectations
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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