Not quite as bad as expected–Treasury increases its bond sales to just $112 billion and not the $114 billion feared

Not quite as bad as expected–Treasury increases its bond sales to just $112 billion and not the $114 billion feared

I guess it’s good news. Today the U.S. Treasury Department said it will slow the pace of increases in its longer-dated debt auctions in the November 2023 to January 2024 quarter to just $112 billion in the next auction, up from $103 billion. Primary dealers surveyed by Bloomberg had expected an increase to $114 billion in next week’s quarterly refunding.

Watch out for more Treasury market volatility this week ahead of auctions

Watch out for more Treasury market volatility this week ahead of auctions

The Treasury will auction a literal truckload of debt this week. And that’s making the bond market nervous. We’ve already had major volatility that wiped out this year’s 4% gain in Treasury bonds. The worry is focused on the long end of the yield curve where demand for 20- and 30-year Treasuries has been light. The Bloomberg index of Treasuries maturing in 10 years and more has slumped 5.7% so far in August.

Watch out for more Treasury market volatility this week ahead of auctions

Treasury market is waiting for heavy week of bond auctions that gets up to speed tomorrow

The yield on the 10-year Treasury didn’t move much today, Monday, March 22, with the yield dropping 3 basis points to 1.69%. Treasury volatility could pick up big time later this week as the government auctions off Treasuries across a range of maturities. The action will reach a crescendo on Thursday as the U.S. Treasury auctions off $62 billion in seven-year notes. It was a disastrous failed auction of that maturity a month ago that ratcheted up volatility in the Treasury market.