MNI UST Issuance Deep Dive: May 2026 - Refunding Preview

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May Refunding Preview: Guidance Is Due To Change

• Treasury’s May Refunding round starts on Monday (1500ET) with the Treasury’s update on financing requirements for the current (Apr-Jun) and next (Jul-Sep) quarters. More attention will be on the full Refunding announcement on Wednesday (0830ET).
• Nobody expects any changes to nominal auction sizes for the upcoming quarter (coupons have held steady for 8 consecutive refundings), but there are fairly split expectations over whether Treasury will make a long-awaited tweak to the guidance ("Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters") at this refunding.
• In a close call, we anticipate that the guidance will be tweaked at this meeting, probably by removing the words “at least”, which would keep open the possibility of coupon size increases next year (“next several quarters”).
• MNI’s central expectation is that coupon upsizings will not take place until February or May 2027. Most analysts now see February 2027 as the base case, with some having pushed back their expectations from November 2026 in recent months.
• May Auction Schedule: The upcoming Refunding month will see auctions starting May 11 with $58B in 3Y Note, May 12 with $42B in 10Y Note, and May 13 with $25B of 30Y Bond (CUSIPS TBA). May as a whole will see $324B in nominal coupon issuance, $19B in 10Y TIPS and $28B in 2Y FRN for a total of $371B for the month.
• Monthly Auction Review: April’s coupon auctions were generally a little soft, but not to the extent that they drove significant market reactions. Five of the seven auctions tailed, but none saw greater than 0.5bp deviations from when-issued levels.