US Treasury increases size of most of its debt auctions

© Reuters. FILE PHOTO: A bronze seal for the Division of the Treasury is proven on the U.S. Treasury constructing in Washington, U.S., January 20, 2023.  REUTERS/Kevin Lamarque/File Photo

(Reuters) -The U.S. Treasury Division on Wednesday acknowledged it plans to “gradually” enhance the dimension of most of its debt auctions in the November 2023 to January 2024 quarter and expects this can need one extra extra quarter of increases after this to meet its financing wants.

MARKET REACTION: U.S. Treasury yields fell after the refunding announcement. The 10-yr yield turned into currently spherical 4.864%.

COMMENTS:

STEVEN ZENG, US RATES STRATEGIST, DEUTSCHE BANK, NEW YORK

“We belief the Treasury would dead the chase of increases to the ten-yr, 20-yr and 30-yr, and that’s what they delivered. The lengthy-dwell rallied after refunding announcement … which is in line with smaller increases than the market expected.”

“Most sellers expected a repeat of the enhance from August, the Treasury delivered moderately much less … and the market rallied moderately on the relieve of that. Positively no longer a repeat of the apprehension after the August announcement.”

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN

“It wasn’t as immoral as feared. The guidance that there will probably be handiest one extra quarter the achieve it increases turned into severely comforting. Lumber away it to the Treasury to no longer refinance when yields were historically low and as an different lengthen length when yields are unusually excessive. The Treasury is a adversarial dealer.”

BRUCE CLARK, MACRO STRATEGIST, INFORMA GLOBAL MARKETS, NEW YORK

The Fed has lowered its bond issuance in the lengthy-dwell of the curve when when compared with August so that you can tranquil the apprehension in bond markets. They lit a fireplace in the bond markets in August with the final refunding announcement and now they’re seeking to set up it out.

STUART COLE, CHIEF MACRO ECONOMIST, EQUITI CAPITAL, LONDON

“The $112 billion it has launched this can promote this quarter will lift some $9 billion in further money when when compared with the final quarter, which I squawk is symptomatic of the truth that the US authorities’s fiscal deficit is rising ever better.”

“I’m a miniature bit of a glorious deal surprised that the Treasury did no longer have to enviornment extra longer dated stuff, given the rising fiscal deficit and the further funding security such longer term borrowing provides. My hunch is that the already increased yields we are seeing in the longer dated allotment of the curve tied its hands a miniature bit of.”

STEVEN RICCHIUTO, U.S. CHIEF ECONOMIST, MIZUHO SECURITIES USA LLC, NEW YORK

“The Treasury took a miniature bit of bit of the borrowing out of the longer dwell and set up it into the belly of the curve. There’s a host of tension into how great extra increases you were going to bag. There turned into discussion that the refunding itself would be substantially better than we had anticipated. We appropriate don’t stare that. They’d appropriate have to elongate the length of the debt over time, it’s no longer esteem it has to be done ASAP.”

“I mediate the market bought earlier than itself by near of how gigantic and how immoral they belief the frilly numbers would be by near of the actual projected enviornment sizes and the dimension for the refunding itself.”

ART HOGAN, CHIEF MARKET STRATEGIST AT B. RILEY WEALTH, NEW YORK

“The Treasury is going to auction 112 billion in debt next week and that begins Tuesday and works its near thru the week and along the curve, but that is modestly above expectations coming into this.”

“The continuing supply of treasury issuance probably places upward stress on yields and that gifts a headwind for equity traders.”