Quarterly reimbursement in the United States: Treasury increases the size of auctions somewhat less than expected

The US Treasury Department has announced its plans for debt auctions from November 2023 to January 2024. It has revealed that it will gradually increase the size of most of its auctions and stated that it will need one more quarter of increases, beyond the current announcement. Sales of 10-year bonds increased by $2 billion, below market expectations of $3 billion.

Main conclusions of the statement:

He US Treasury Offers $112 Billion in Securities to Repay Approximately $102.2 Billion in Treasury bonds in private hands maturing on November 15, 2023. This issue will raise new funds from private investors worth approximately $9.8 billion.

Based on projected medium and long-term financing needsTreasury intends to continue gradually increasing the size of coupon auctions in the coming quarters from November 2023 to January 2024.

The Treasury anticipates that an additional quarter of increases will probably be necessary of coupon auction sizes beyond the increases announced today.

The Treasury plans to increase the size of 2- and 5-year auctions by $3 billion per month, 3-year auctions by $2 billion per month, and 7-year auctions by $1 billion per month. As a result, the size of the 2-, 3-, 5- and 7-year auctions will increase by $9 billion, $6 billion, $9 billion and $3 billion, respectively, by the end of January 2024.

The Treasury plans to increase both the new issuance and the size of the reopening auction of the 10-year bond by $2 billion and the 30-year bond by $1 billion. The Treasury plans to maintain the volume of the new issuance and the reopening auction of the 20-year bond.

Market reaction

Wall Street futures moved higher and Treasuries rose. The 10-year yield fell from 4.90% to 4.83%. Market participants are also digesting the ADP jobs report awaiting the Federal Reserve’s decision.