USTs have underperformed in part due to.....>

US TSYS: USTs have underperformed in part due to concerns about Treasury supply

with the May quarterly refunding announcement looming (due 0830ET), given the

Treasury's $2.999trn borrowing requirement.

- Monthly coupon sizes will undoubtedly increase, with May announces of 3/10/30s

coming today. Broad consensus from sell-side: +2bln vs April in 3Yrs (to

$42bln), +$4bln in 10Yrs to $29bln, $4bln in 30-Yrs to $21bln. Wrightson ICAP

expect sizes will rise substantially but gradually over time, but risks are "all

on the high side".  

- Expectations are for a 20-Yr to be launched, w specifics next week and initial

sale week after that. Initial size seen btwn $10-16bln, w $13-15bln consensus.

- Bill issuance will undoubtedly rise substantially to meet the bulk of the

financing need. Wrightson ICAP sees $2.7trn total increase in net supply in from

$2.3trn end-March to $5trn end-Jun, before easing in Q3. 

- Mixed opinions on SOFR FRNs being offered - most see it as being one

announcement too many for this quarter but when it is, will likely be a 1Yr.