Tax reform to increase fiscal deficit Investors worried about debt expansion plunged US short-term debt hit a nine-year high

The U.S. auctioned off a batch of three-month and six-month short-term treasury bills and a series of two-year fixed-rate government bonds on Tuesday. As a result, the successful bid rate rose to its highest level in more than nine years because of a sharp drop in demand, The yield on short-term two-year bonds rose to 2.26% yesterday, the highest in more than nine years. Analysis of long-term debt auction results worried that the debt has a greater impact.

Taobao reporter Li Yaohua

The U.S. Treasury Department auctioned a batch of three-month bills worth US $ 51 billion on Tuesday night. The winning rate rose to 1.63%, significantly higher than the 1.57% recorded at the auction last week. Meanwhile, a batch of the $ 45 billion six-month bills were auctioned on the same day. The interest rate also rose to 1.82%, which was also clearly above the 1.785% level recorded at the last auction. The interest rate on the three-month note is the highest rate ever for a winning bid of 1.69% since the auction on September 8, 2008. The six-month note is also the highest bid rate ever since the average of 1.9% recorded on the auction on September 8, 2008. A batch of short-term bills worth a total of 55 billion U.S. dollars was also traded at 1.38%. The winning percentage of the short-term bills also dropped to 2.48 times, the lowest since 2008.

Selling price even lower than the par value

The winning rate is the discount rate, reflecting the selling price of treasury bills even lower than its nominal value. Take a three-month note with a nominal value of $ 10,000 as an example. This time, the selling price will only be $ 9,958.8. A six-month note worth $ 10,000 will cost $ 9,907.99. Treasury bills are usually auctioned on Treasury bills Monday, but this week on Tuesday because Monday is the Presidents Day holiday.

In addition, the Ministry of Finance also auctioned a total of 55 billion U.S. dollars worth of two-year fixed rate bonds at a winning rate of 2.255%, the highest since August 2008. The Treasury Department will auction a further batch of five-year $ 35 billion five-year bonds on Wednesday and a $ 29 billion seven-year government bond on Thursday, both at a higher auction than the previous month, Will auction a batch of two-year floating rate notes worth 15 billion U.S. dollars. The industry is even more worried about the longer bonds, said Tom di Galmoma, managing director of Sentort Global Holdings’ government trading and strategy group, who is more concerned with the results of the five-year and seven-year bond auctions.

U.S. plans to issue 3.4 trillion euros this quarter

Since the Trump administration hurriedly passed the tax reform program last year, the U.S. government is expected to bear the deficit of over 1.5 trillion U.S. dollars. Coupled with the two-year fiscal budget passed earlier this month, the U.S. government has made the U.S. government pay its defense spending and other related expenses A sharp increase of 300 billion U.S. dollars, the market worried about the U.S. federal government deficit will gradually increase. The total amount of bonds and bills auctioned by the U.S. Treasury this week was 258 billion U.S. dollars, and it is expected that the interest rate will rise to gain investors’ favor.

In view of the increasing U.S. debt, the Ministry of Finance has now reduced its outstanding government bonds. According to the January financial figures, the Ministry of Finance intends to issue a total of 441 billion U.S. dollars (about 3.44 trillion Hong Kong dollars) of bonds in the market this quarter, Most of the bonds fall into short-term categories.