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Thursday, September 23, 2021

There Is Now A Treasury Shortage

Earlier this morning we showed something remarkable in the Fed's ongoing attempt to inject a record amount of liquidity into the financial system: on Friday morning, the Fed held a $500 billion term repo operation and nobody showed up. There were zero submissions of either Treasury, Agency of MBS securities by Dealers who appear to…

The Entire Treasury Yield Curve Is ‘Inverted’

The market is now demanding almost 4 rate-cuts this year - a stunning example of the desperation for monetary policy mavens to save the world through easy money... and maintain the 'buy the dip' strategy that a generation of money managers has become conditioned to. Source: Bloomberg As former Dallas Fed's Fisher noted yesterday: "Does…

Dow Loses 29k, Treasury Yields Hit 3-Mo Lows

Well that escalated quickly... Will the dip-buyers return once again at the 29k level? Bond yields leading the charge lower... Source: Bloomberg Paging Larry Kudlow.

US Treasury Starts Off New Decade With Medicore, Tailing 3Y Auction

The US Treasury has started off the new year, and decade, of Treasury coupon issuance with a bit of a dud in the form of a mediocre, tailing 3Y auction. The sale of the $38BN in 3Y paper (CUSIP Z29), stopped at a high yield of 1.567%, tailing the When Issued 1.564% by 0.3bps, the…

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…

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