EUROPEAN FISCAL: Caveats to German Fiscal Balance Figures, Tax Estimates Next

The questions that we have selected for Instant Answers for the September FOMC statement and SEP (scheduled to be released at 1400ET Wednesday):

• Fed funds rate range maximum
• Number of dissenters to size of rate move
• Number of dissenters preferring a larger cut
• Median projection of fed funds rate at end-2025
• Median projection of fed funds rate at end-2026
• Median projection of fed funds rate at end-2027
• Median projection of fed funds rate at end-2028
• Median projection of longer run fed funds rate
• Number of 2025 dots > 4.125% 
• Number of 2025 dots > 3.875% 
• Number of 2025 dots < 3.875%
• Number of 2025 dots < 3.625% 

• $13bn 20Y re-open at 1300ET (912810UN6)
• As a barometer of recent duration demand, last week’s 30Y auction was on the screws but with stronger details as the bid-to-cover and indirect take-up increased.
• That’s in contrast to last month’s 20Y auction which was in-line (high yield 4.876% vs WI 4.877%) but with weaker details.
• The bid-to-cover slipped from 2.79 to 2.54 for its lowest since May and before that February.
• More notably, the indirect take-up dropped from 67.4% to 60.6% for its lowest since Feb 2024 and before that Nov 2021. Directs took up some of that slack however, rising from 21.9% to 26.5% whilst dealer take only increased from 10.7% to 12.9%.
• Select stats from the past five auction average: Trade through by 0.1bp (ranging from through by 1.5bp to tailing by 1.2bp), bid-to-cover of 2.62 (ranging from 2.46 to 2.79), indirect dealer take of 66.9% (ranging from 60.6% to 70.7%) and dealer take of 14.2% (range 10.7% to 17.0%).
• Bloomberg currently shows the WI at 4.6175% for some 26bp lower than last month’s auction which could trim some relative demand. It would mark the lowest high yield since Oct 2024. 

• US TSY TO SELL $100.000 BLN 4W BILL SEP 18, SETTLE SEP 23