Wednesday, October 16, 2013

Treasury auction survives the budget impasse

Tuesday was a Treasury auction day. It was interesting to see how market participants value new 3-month T-bills. They auctioned Tuesday and then settle on Thursday, October 17. There are also auctions on Wednesday as well.
See the auction results here, from later in the afternoon:
The 3-month T-bill did have a higher rate of 0.13%, but I say that wasn't so bad, all things considered. The cover ratio of demand to actual bills was somewhat lighter than usual, but still reasonably strong at about 3.13. Specifically, there were bids totaling $109 billion for the $34 billion of T-bills offered.
For Bloomberg coverage of the Auction results:
"T-Bill Rates Surge as Auction Demand Falls Amid Budget Impasse"
The headline and much of the tone of that story is quite severe, but I say the 0.13% rate and cover ratio of 3 is really good news.
For the Treasury report for the actual auction:
Interesting that the Treasury Auctions have been continuing despite the government shutdown.

-- Jack Krupansky


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