MNI UST Issuance Deep Dive: Dec 2023

EXECUTIVE SUMMARY:

The November 1 Treasury refunding announcement brought a more market-friendly announcement than had been expected/feared by some analysts as seen in our preview, both on long-end auction sizes and on Treasury's guidance that "Treasury anticipates that one additional quarter of increases to coupon auction sizes will likely be needed beyond the increases announced today" (some had expected rises through not just Feb 2024’s refunding but potentially May’s).

• Even so the upsizing was substantial, with the November refunding month bringing $276B in coupon sales, vs $246B in August’s refunding.
• November’s coupon auctions were generally mixed, with 4 coupons tailing and 3 trading through. However, three of the tailing auctions were extremely weak, while the 20Y trade-through stood out as the strongest.
• We don’t usually single out individual auctions in our monthly Deep Dives but November’s 30Y Bond auction was historically weak and - while possibly a one-off - does not bode well for demand for duration.
• The December auction schedule kicks off with 3Y Note and 10Y Note on Dec 11 – details to be announced on Dec 7.

Please see PDF for full analysis:

MNI_US_DeepDive_Issuance_2023_12.pdf