The Treasury is contemplating cuts to the sales of its longest-dated debt while expanding auctions of short-term bills and notes. Financial institutions are split on the rollout, with Citigroup expecting cuts to 20- and 30-year bond sales this month, while JPMorgan and UBS anticipate unchanged issuance sizes that would maintain upcoming refunding auctions at $125 billion. However, pivoting toward shorter maturities increases market vulnerability for a government already issuing over half a trillion dollars in bills each week.
Key points
Treasury officials are poised to modify multi-year debt guidance in an effort to suppress…: Treasury officials are poised to modify multi-year debt guidance in an effort to suppress elevated long-dated borrowing costs.
Wall Street primary dealers are sharply divided over whether auction cuts will begin imme…: Wall Street primary dealers are sharply divided over whether auction cuts will begin immediately or remain deferred until May or beyond.
Relying on short-term debt to finance massive annual deficits increases refinancing frequ…: Relying on short-term debt to finance massive annual deficits increases refinancing frequency and exposes the federal government to sudden market volatility.
Sources checked by our analysis pipeline: 1
(Bloomberg) -- After Treasury Secretary Scott Bessent surprised dealers with his willingness to intervene in the bond market to drive down yields in recent months, Wall Street is now girding for the biggest revamp in guidance for US Treasuries issuance since early 2024.
Many dealers expect the Treasury to alter the guidance in its quarterly policy statement, which for more than two years has laid out steady plans for note and bond issuance. A shift in Wednesday’s announcement could pave the way for potential cuts in 2027 to sales of the longest-dated debt, balanced by bigger auctions of bills and shorter-term notes.
Some are prepping for more drastic action. Citigroup Inc. predicts the Treasury will announce cuts to sales of 20- and 30-year bonds starting this month — effectively violating the guidance issued in the last so-called quarterly refunding statement. Just one week after that last plan, Bessent unexpectedly ramped up buybacks of outstanding securities, in a move seen as a reaction to a surge in yields.
“Buybacks are too small to really move the needle,” April LaRusse, head of…
Market participants observed a downward drift across domestic equities as the trading session concluded. Broader regional pressures kept overall investor sentiment subdued, although key benchmark tracking managed to hold its prior ground. This mixed finish highlights ongoing hesitation among traders navigating the current local economic environment.
Australian lender Westpac has recorded a slight increase in its full-year profit. Additional details regarding the bank's financial results were not disclosed.
Tax investigators uncovered an elaborate scheme where a Delhi-NCR husband and wife fabricated massive financial records to minimize their tax liabilities over a five-year period. The couple allegedly deployed altered donation slips and forged educational documents to amass illicit savings, which authorities report were subsequently funneled into buying half-a-dozen real estate properties. They now face substantial financial penalties alongside broader legal proceedings for their fraudulent activities.