Four Banks Disagree About One Treasury Sentence. Three Are Forecasting Wording.
The US Treasury publishes its November quarterly refunding at 13:30 UTC, and the unknown is not a number but a sentence.
The borrowing need was published on Monday — $618 billion for October to December, $10 billion lower than August assumed because the quarter opened with $34 billion more cash than planned, and $800 billion for January to March. The sizes, if the guidance holds, are $58bn of three-year notes on 9 November, $42bn of ten-years on the 10th and $25bn of 30-years on the 12th: $125 billion, with no Wednesday auction because 11 November is Veterans Day. What is in dispute is the sentence in which Treasury "anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters" — and four banks have four forecasts for it. Citigroup expects 20-year and 30-year cuts announced this month, UBS expects the wording to change before the sizes do, JPMorgan expects the phrase to survive into next year, Barclays expects "coming quarters". Three of the four are forecasts about wording, which means the day's largest duration event has no consensus field to size against. The hour is issuer-stated as 8:30 a.m. with no time zone printed, and it was 12:30 UTC a week ago: this is the first refunding since the clock change, and it shares its minute with the September trade balance, fifteen minutes after ADP. And the Congress that just changed hands gets no vote on this quarter — the plan announced today finances a quarter that ends before the new Congress is seated, and the February refunding is already dated 1 February 2027.