Treasury's $87 B 3- and 6-month bill auctions garnered tepid demand
Treasury's $87 B 3- and 6-month bill auctions garnered tepid demand after strong buying at the last couple of bill auctions following the Fed's decision to start buying bills for reserve management purposes. Additionally, rates have richened following last week's Fed rate cut. But with the Fed having indicated that policy is on hold for now, the bills looked a little too expensive here. The $45 B 3-month tranche was awarded at 1.520%, tailing from the 1.505% at the bid deadline. But it is 10 bps below the 1.620% award last week. There were $117.1 B in bids for a 2.63 cover, well below last week's 3.10 and the 3.01 the week before that. And it's below the 2.86 average. Indirect bidders were awarded 40.8%, also weaker than last week's 60.0% and the 65.0% the week before that. And it's also worse than the 48.0% average. The $42 B 6-month bill stopped at 1.535%, also tailing versus the 1.520% at the deadline, while it's 7.5 bps below last week's 1.610%. Bids totaled $112 B for a 2.69 cover, also underprforming the 3.23 from last week and the 2.92 average. Indirect bidders accepted 39.8% versus 57.0% previously and the 49.8% average.