This week brings the Q2 Treasury refunding, with the main release on April 30th. We do not expect any change in issuance sizes. We think an adjustment to its guidance of stable nominal auctions “for at least the next several quarters” is unlikely given recent volatility. We believe the Q2 treasury refunding announcements could be mildly +ve for UST-Swap spreads as well as long end yields too. We now expect the 10yr UST to be testing 4.00% levels by end June’25. Stop to the view is a close above 4.45. CMP is 4.24. The combination of the market environment and medium-term uncertainty around funding needs make it hard to have strong conviction on the timing of when coupon auction sizes might rise. We've shifted out our baseline assumption for the start of auction size increases to August 2026 (from February 2026), which would keep the bill share stable modestly above 20% over the medium-term under our current fiscal path. There could also be discussions around increasing the size of buybacks.
