US TSYS/SUPPLY: Feb Refunding: Coupon Guidance Tweak, Monitoring Bills Demand
Feb-04 13:31
- Treasury tweaked slightly its policy statement's guidance on future auction size increases, adhering to keeping coupon and FRN auction sizes for "at least the next several quarter" and noting it "continues to evaluate" potential future increases.
- It added a sentence saying "Treasury is monitoring SOMA purchases of Treasury bills and growing demand for Treasury bills from the private sector," a hint that future upsizing may be led by short-end increases. MNI expects the next upsizing to be in November and consensus is fairly split between November and February 2027.
- Full guidance paragraph: "Treasury believes its current auction sizes leave it well positioned to address potential changes to
the fiscal outlook and to the size and composition of the SOMA portfolio. Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters. Treasury is monitoring SOMA purchases of Treasury bills and growing demand for Treasury bills from the private sector. Looking ahead, Treasury continues to evaluate potential future increases to nominal coupon and FRN auction sizes, with a focus on trends in structural demand and potential costs and risks of various issuance profiles." The table below presents, in billions of dollars, the actual auction sizes for the November 2025 to January 2026 quarter and the anticipated auction sizes for the February to April 2026 quarter:
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US TSYS: Kashkari & Swelling Issuance Knock Bonds Off Highs
Jan-05 13:30
Tsys trade away from session highs as the $ issuance pipeline continues to build and with ’26 Fed voter Kashkari suggesting that the central bank could be “pretty close” to neutral policy rate levels (albeit with some more dovish remarks surrounding that comment seemingly limiting the move).
- TY still remains comfortably within Friday’s range with Asia-Pac lows untested during the recent pullback, last +0-01+ at 112-08. initial support and resistance 112-01+ & 112-20.
- Cash curve twist steepens, yields 1.5bp lower to 0.5bp higher, belly outperforms.
EURIBOR OPTIONS: ERZ6 97.93/98.43 Call Spread Lifted
Jan-05 13:27
ERZ6 97.93/98.43 call spread paper paid 8.25 on 5K.
PIPELINE: Corporate Bond Update: Mexico, Constellation Energy
Jan-05 13:25
- Latest addition to the corporate issuance docket:
- 1/05 $Benchmark United Mexican States 8Y, 12Y, 30Y details TBA
- 1/05 $Benchmark Constellation Energy 4pt details TBA
