Treasury's agenda for the November refunding meeting wanted dealer insights
Treasury's agenda for the November refunding meeting wanted dealer insights on an often proposed 20-year bond offering, and specifically asked about sources of demand and an estimated annual market demand, as well as what volume of issuance would be needed to achieve benchmark liquidity. Also what spread would it be expected to price relative to the 10- and 30-year maturities. Of interest, there was no mention of an ultra-long bond on the order of a 50- or 100-year maturity, and they may have been taken out of the running. Nevertheless, the Treasury's financing slate will be under a significant burden in 2020 as it needs to finance the better than $1 tln deficit, while the increased auction volumes from last year start to come due (Treasury increased the 2-year volume from $26 B in January 2018, up to the current $40 B). The longer end of the market is underperforming with the 10- and 30-year yields up about 4.5 bps to 1.798% and 2.293%, respectively. The dealer meeting will take place on October 24, 25, ahead of the November refunding (details announced October 30).