US TSYS/RESEARCH: Wrightson analysts noted that “the Treasury faces
another week of heavy supply” as “this week’s various bill auctions will
raise a projected $21B of new money on Thursday, while the $118B of
notes being sold from Tuesday through Thursday will raise $90B of new
cash when they settle next Wednesday.” Wrightson analysts noted that
“today’s 3- and 6-month bill auction will total $57 billion, and
represents a $2B paydown in those maturities. In a surprise (to us, at
least), the 3-month side of the offering was bumped up by $1 billion to
$28 billion, while the 6-month is unchanged at $29 billion. We continue
to think the Treasury is on track to pile up much more cash by March 31
than its official borrowing projections assumed.” Their forecasts
suggest the Treasury will have roughly $110B of non-SFP cash on hand on
March 31, versus a notional target of $80B in mid-qrtr projections so
“in light of that, our guess had been that the next change in bill sizes
would be a reduction rather than another increase.”