From mint · · 1m
T-Bill Yields Rise as Funding Markets Diverge
Treasury bills see sharp yield increases amid growing supply, but overnight repo markets stay calm.
In brief
Treasury bills see sharp yield increases amid growing supply, but overnight repo markets stay calm. Treasury-bill yields rose to 4.05% as new issuance tests investor demand, while overnight repo rates remain stable. Originally reported by mint.
T-Bill Yields Rise
Treasury-bill yields have risen sharply as a wave of new issuance tests investor demand.
Record-Low Demand
The eight-week bill auction showed record-low demand and yields at 4.05%, the highest in over a year.
Investor Reluctance
Investor reluctance to pile into growing T-bill supply due to widening deficit and uncertain Fed rate path.
Funding Market Stability
Overnight funding markets remain flush with cash despite growing pressure in T-bill debt.
Barclays View
Barclays Plc strategist Samuel Earl noted competing forces shaping money markets this month.
Treasury Issuance
Treasury has issued nearly $100 billion of net T-bills through first half of October.
Repo Rates Stable
Repo rates have remained stable due to structural decline in leverage demand and compressed basis opportunities.
The short version
Treasury-bill yields rose to 4.05% as new issuance tests investor demand, while overnight repo rates remain stable.
