US TSYS: Curve Steeper, Tsys Lower After Data

 As indicated by the table provided earlier, Treasury Coupon/FRN sizes unchanged as expected for upcoming quarter. But not in the table: TIPS sizes were upped as per MNI (and general consensus) expectations: "Over the May to July 2025 quarter, Treasury plans to maintain the May 10-year TIPS reopening auction size at $18 billion, increase the June 5-year TIPS reopening auction size by $1 billion to $23 billion, and increase the July 10-year TIPS new issue auction size by $1 billion to $21 billion." The policy statement is here.

• Latest tentative auction schedule is here.
• Treasury is looking to improve the "efficacy" of its buyback program. Given the success of the buyback program since its launch last year, Treasury believes it is an appropriate time to consider ways to improve its efficacy. Accordingly, Treasury will evaluate a broad range of possible enhancements such as: changes to maximum purchase amounts, buyback operation scheduling and frequency, security eligibility, maturity bucket composition, execution process, and counterparty eligibility. In considering these options, Treasury will be guided by the objective of financing the government at the lowest cost over time." Quarter-ahead buyback schedule is here, including cash management operations surrounding the June tax season.
• On the x-date, "Treasury is not able at this time to provide an estimate of how long its cash and extraordinary measures may last. We expect to provide an update during the first half of May after the majority of receipts from the April income tax filing season have been received." Tsy Sec Scott Bessent suggested this week that we could get the latest estimate by next week. Consensus keeps getting pushed back on the x-date, which now looks to be in August, September or even later given solid tax receipts and increased cash flow from tariffs.

• 5,000 SFRU5 95.25/95.75 put spds, 2.5 ref 96.31 at 0834:01ET

• Bund drops 13 ticks on the PCE and GDP price index beat, as well as Personal Consumption, but Volumes have been on the more subdued side, and downside move lacks pure traction, after the US Annualised QoQ GDP fell to -0.3% vs a -0.2% consensus.
• In US Tnotes (TYM5) over 12k was sold.