THE WEEK AHEAD ECONOMIC DATA RELEASE 30TH NOV 2025 EX OIL COMMODITIES ARE SET FOR MORE UPSIDE IN CY26 CHINA IS IRREVERSABLY DECOUPLING FROM US: THINK 2027, THINK TAIWAN IS THIS DECEMBER DIFFERENT FOR DOLLAR THE WEEK AHEAD ECONOMIC DATA RELEASE 23RD NOV 2025 DUTCH PENSION REFORMS: THE NEXT LONG END WORRY NVIDIA: WINNER TAKES IT ALL UK AUTMN BUDGET: PREVIEW BUY 10YR UK GILTS AGAINST SELL 10YR GERMAN BUNDS BUY 10YR UK GILTS SELL 10YR UST BUY S&P 500
Macrospectrum
Subscribe icon
Rates

CAN THE NOV US TREASURY REFUNDING ANNOUNCEMENT SEE A CUT IN DATED BORROWING

ADMIN || 9th October 2025

US Treasury today said it will sell a record amount of four-, eight- and 17-week bills in coming days, the second straight week of increases. It is also expected to boost the sizes of its 13-, 26- and 6-week offerings when those are announced tomorrow.

Treasury said it plans to sell a record $110 billion of four-week bills on Thursday, which is $5 billion larger than the previous offering. It will sell a record $95 billion of eight-week bills on that same day, which is also $5 billion larger than the previous week’s sale. It will also sell $69 billion of 17-week bills on Wednesday, which is $2 billion larger than the previous offering. Treasury has said in its last quarterly refunding announcement it anticipated additional increases in bill auction sizes in October.

The above implies that US treasury is now “on track to raise much more new cash” in the fourth quarter than earlier borrowing projections suggested.

A change in Treasury’s coupon issuance strategy might imply reduction debt auction sizes after the department signalled in July that it will rely more on the shortest-dated securities to fund the gaping federal deficit. At the time, it anticipated keeping the size of its note and bond auctions unchanged “for at least the next several quarters.”

This will further pull-down long end UST yields. With US yields of all maturities falling toward their lows of the year as a deteriorating labor market paves the way for fresh Fed rate cuts, pressures on long-end debt have been easing.

We believe the increase in stable coins has led to a increase demand for short term US treasuries. Stablecoins are pegged to highly liquid assets such as the U.S. dollar and the tokens can drive demand for U.S. Treasuries by requiring issuers to hold large, liquid, and safe reserves to support a 1:1 peg to the greenback. Currently 80% of the stablecoin market is invested in either Treasury bills, known as T-bills, or repos, which are repurchase agreements. That represents about $200 billion, roughly less than 2% of the overall Treasury market. But the stablecoin market is growing fast. J.P.Morgan recently projected the stablecoin market to reach $500 billion by 2028, while Standard Chartered estimated $2 trillion by 2028 and Bernstein $4 trillion by 2035.

So, to summarise, we won’t be surprised to see if the US treasury cuts on the dated issuances when they announce the November treasury refunding details. This might augur well for longer dated UST specially the 30yr UST where we see yields dropping to 4.35% from the current 4.75% levels.

We have released a premium opinion piece with similar thoughts on 4th October as below:

https://macro-spectrum.com/opinion/is-the-us-long-end-undervalued

Legal Disclaimer:

Trading foreign exchange/commodities/equities/bonds on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange/commodities/equities you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange/commodities/equities trading and seek advice from an independent financial advisor if you have any doubts.

Read More