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Tuesday, February 25, 2020

The Fed Will Buy 40% Of US Treasury Net Issuance In 2020

With the federal deficit running 22% higher during the first ten months of 2019 compared to the same period last year ($800bn vs. 655bn), student loans and other federal programs which increase the Treasury’s overall borrowing are running somewhat lower. Given the latest numbers, Deutsche Bank estimates Treasury’s total 2019 borrowing will come in at…

US Treasury Is Considering A 50-Year Bond For The First Time As It Warns...

Today's latest quarterly refunding announcement was closely watched for any commentary on how the Treasury may respond to the Fed's recent "Not QE" announcement, which has the central bank buying up $60BN in Bills every month, which according to some strategists could cause a shortage of net Bill issuance, leading to fresh money market turmoil.…

POMO Is Back: Here’s What Treasury Bills The Fed Will Buy

As it pre-announced last Friday, the Fed will resume QE by purchasing $60billion/month in bills at least until 2Q 2020 starting on October 17. As has been widely discussed, and mocked, already, the Fed highlighted that these purchases were for reserve management only and have "no material implications for the stance of monetary policy", although…

Treasury Puts Financial Institutions “On Notice” Over “Very Powerful” New Turkey Sanctions

President Trump has again threatened more Turkey sanctions. In a surprise Treasury Department press briefing early Friday afternoon, Steven Mnuchin said the president has "authorized" new sanctions on NATO member Turkey over its ongoing assault on US-backed Syrian Kurdish groups in northern Syria, also as bipartisan legislation targeting Turkey has been introduced in both the House and Senate.  However,…

30Y Treasury Auction Prices At Record Low Yield Of 2.170%

While the week's final coupon auction was largely in line with recent Treasury sales, it was remarkable for one specific reason: it just closed at the lowest high yield on record, stopping out at 2.170%, tailing the WI 2.169% by 0.1bps but pricing not only below the Sept yield of 2.270%, but also below the…

Strong 10Y Treasury Sold At Lowest Yield Since August 2016

While yesterday's 3Y auction was strong if not spectacular, today's 10Y auction was a bit more impressive. Printing at a high yield of 1.590%, the auction stopped through the When Issued 1.591% by 0.1bps. It was the lowest stop out for a 10Y auction - technically a 9-year 10-month reopening - since August 2016, and…

Treasury Yields Are Crashing-er

10Y US Treasury yields are down 8bps overnight, accelerating in the last hour to 1.62% (as 30Y yields crash below Effective Fed Funds rates) and stocks are starting to catch down... Stocks have started to tumble after a low volume ramp overnight As the yield curve collapses... But Stocks have a long way to fall…
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