U.S. Treasury's refunding announcement......>

US TSYS: U.S. Treasury's refunding announcement Wednesday morning at 0830ET,

dealers anticipating gradual increases in auction sizes that start in the short

end but can pick up out the curve. JP Morgan strategists "expect Treasury to

announce $25bn 3-year notes, $24bn 10-year notes, and $16bn 30-year bonds for

auction the following week, each $1bn larger in size than the November

refunding." Nomura strategists estimate a total of $66 billion for the latest

announcement, "comprised of new 3yr ($26bn), 10yr ($24bn) and 30yr bonds

($16bn)." According to Nomura's economist projections, they see "a budget

deficit of around $750bn in FY2018 and $1trn in FY2019. The fact that deficits

continue to increase at this stage of the cycle and the Fed's B/S UST roll-offs

will continue to increase before they hit their maximum cap later in 2018 could

lead to much higher issuance needs in the months / quarters ahead." On the

near-term horizon, Nomura cautions that with the "budgetary process and

temporary spending bill complicating matters, Treasury must still contend with

the lingering debt ceiling risk and a potential early-March drop-dead date.