Treasury bond issuance volume halves? Just two weeks ago it was at a high, now 1.5 billion USD in new bonds is about to be issued
- The US Treasury will auction $75 billion of 1-month Treasury bills (maturing July 7, 2026) and $75 billion of 2-month Treasury bills (maturing August 4, 2026) on Thursday. Based on settlement on June 9, this issuance will bring about $15 billion in cash inflow. The auction schedule is: non-competitive bids close at Wednesday 23:00 (UTC+8), competitive bids close at Wednesday 23:30 (UTC+8).
- In terms of issuance scale, the current auction volume has decreased significantly compared to two weeks ago. Due to the supply contraction, some demand is expected to emerge. However, institutions point out that some believe the reason to buy these securities is—if issuance reductions lead to lower overnight collateral rates, it will bring positive carry opportunities—but this view is not fully convincing. Regarding forward roll, the 1-month Treasury bill’s roll value is about 0.3 basis points, which has some appeal; the 2-month roll value is only 0.6 basis points, and compared to the weekly spread of about 2.7 basis points between the 2-month and 3-month bills, it has no practical value.
- Historical auction statistics (based on the average of the past six times): the 1-month bill’s bid-to-cover ratio is 2.80, with indirect bidders accounting for 58.94%, direct bidders 4.44%, and dealers 36.61%. The 2-month bill’s bid-to-cover ratio is 2.93, with indirect bidders accounting for 50.84%, direct bidders 3.48%, and dealers 27.53%.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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