TREASURY QUARTERLY REFUNDING (Q2): US to sell USD 45bln of 3yr notes (exp. 46bln) on May 10th, USD 36bln of 10yr notes (exp. 36bln) on May 11th, and USD 22bln of 30yr bond (exp. 22bln) on May 12th

• Announces quarterly refunding of USD 103bln, to raise about USD 55.2bln of cash and refund USD 47.8bln in maturing securities. 


• US Treasury expects to reduce 2-,3-and 5-year note auctions each by USD 1bln per month over the next three months (Dealers expected auctions to be unchanged)


• Expects to cut 7yr note auctions by USD 2bln per month (dealers largely expected either USD 1bln or 2bln).


• Expects to cut 10yr notes by USD 1bln per month (as expected).


• Expects to cut 30yr bonds by USD 1bln per month (as expected).


• Expects to cut 20yr bonds by USD 2bln per month (as expected).

TIPS

• US Treasury says it will keep May 10yr TIPS reopening auction size at USD 14bln, raise June 5yr TIPS auction by USD 1bln to USD 18bln and raise July 10yr TIPS new issue auction by USD 1bln to USD 17bln.

BILLS

• Intends to change the 4-month (i.e., 17-week) CMB into a benchmark bill (part of the regular weekly bill issuance schedule going forward).


• During this transition, Treasury will continue to issue the 4-month CMB at a regular cadence.


• Treasury also intends to maintain the Tuesday settlement and maturity cycle when the 4-month CMB becomes a benchmark bill.


• Additional implementation details, including the likely timing of the first benchmark auction, will be provided at the August quarterly refunding.

Statement

• Auction sizes are expected to level out next quarter, though the group acknowledges Treasury may need to consider further reductions based on evolving fiscal needs.

TBAC MINUTES:

• Most primary dealers were supportive of continued gradual increases in TIPS; suggested increases should be focused in the 5- and 10-year tenors, with some recommending increases only in the 5-year tenor given higher demand in the short-end.


• A few primary dealers noted risks that lower realized inflation outcomes could affect TIPS demand and suggested that Treasury consider only gradual increases in TIPS auctions sizes.

via US Treasury

Analysis details (13:30)

• The Treasury on Monday already announced a refunding of USD 110bln will raise around USD 55.2bln of cash in the quarter and refund USD 54.8bln in maturing securities.

04 May 2022 - 13:30- Fixed IncomeImportant- Source: Newswires