US: Trump Announces DAMAC Investment, Pledges To Reverse Biden Offshore Oil Ban
US President-elect Donald Trump, speaking to the press for the first time since Congress certified his election win yesterday, has announced that Emirati firm DAMAC Properties will invest "at least USD$20 billion dollars over a very short period of time" to build "massive" new data centres in the Southwest and Sun Belt of the United States.
- Trump, speaking alongside DAMAC founder Hussain Sajwani, noted a campaign trail pledge to "move quickly through the environmental process" anyone who invests over USD$1 billion in the US.
- Trump also pledged to reverse a measure announced by President Biden this week that would indefinitely ban new offshore oil and gas production in large swathes of US coastal waters: "I will reverse it immediately, it will be done immediately and we will drill baby drill... and the energy costs are going to come way down."
- It is unclear if Trump has the authority to reverse the ban, Axios noted on the measure: "The steps rely on a provision from a 72-year-old law and affect wildlife-rich areas in the northern Bering Sea; the eastern Pacific Ocean off the West Coast; the eastern Gulf of Mexico; and areas up and down the East Coast... Unlike executive orders that Trump could overturn with the stroke of a pen, Biden's actions rely on an open-ended provision in the 1953 Outer Continental Shelf Lands Act."
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MNI UST Issuance Deep Dive: Dec 2024 (2/2)
Throughout November’s policy and market volatility, though, Treasury auctions largely impressed, with 5 of 7 nominal coupon sales trading through.
- Auction Results: November’s nominal coupon auctions were generally strong, with five out of seven auctions trading-through, of which four saw a positive reading on MNI’s Relative Strength Indicator (RSI). The remaining two auctions; 3 and 20-year auctions tailed. See page 2.
- Upcoming Supply: Issuance resumes next week with sales of $58B in 3Y Note, $39B in 10Y Note (reopen), and $22B in 30Y Bond (reopen). December is set to see $15B in nominal Treasury coupon sales, in addition to $22B in 5Y TIPS and $28B FRN for a total of $365B – slightly below the Oct and Nov totals of $369B which were joint-highest since Oct 2021.
- MNI's review includes a calendar of upcoming auctions and buyback operations.
US TSYS/SUPPLY: MNI UST Issuance Deep Dive: Dec 2024 (1/2)
MNI's latest US Treasury Issuance Deep Dive has just been published (PDF link here):
November proved a dramatic month for Treasuries. Yields were volatile before and after the Nov 5 election - after ending October at 4.28%, 10Y yields peaked at five-and-a-half-month high just above 4.50% mid-month before closing November just below 4.18%, as markets attempted to price in the implications of a Republican “sweep”.
- Also buffeting rates was speculation over the would-be successor to Treasury Secretary Yellen. President-elect Trump’s selection of hedge fund manager Scott Bessent was greeted with bull flattening in the curve, implying perhaps that he’s seen as more cautious on fiscal deficits than some of the alternatives (he has expressed support for halving the annual budget shortfall to 3% of GDP).
- The first quarterly Refunding process of Bessent’s Treasury is in early February, by which point we may start to have a better sense of the incoming administration’s approach to both fiscal policy and to more issuance-specific considerations such as duration management.
- Bessent for instance has argued that Yellen’s Treasury erred from a risk management perspective by boosting short-duration issuance, and there are suggestions he would be in favor of reversing course, telling Bloomberg in June “When rates are very low, you should extend duration…I think it’s very unfortunate what Secretary Yellen’s doing. She’s financing at the front end, and she’s making a bet on the carry trade, which is not good risk management.”
US LABOR MARKET: MNI US Employment Insight: Soft Enough To Keep Fed Cutting
Our latest Employment Insight has just been published and emailed to subscribers.
