2017 Economic Calendar
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3-Month Bill Auction  
Released On 7/10/2017 11:30:00 AM For 7/10/2017 11:30:00 AM
Auction Results
Total Amount$39 B 
Bid/Cover2.87 
3-Month Bill Treasury Rate1.040% 

Highlights
Coverage was soft for Monday's T-bill auctions, at 2.87 for the 3-month the lowest in at least two years and the lowest since May 22 at 3.20 for the 6-month. Demand from end investors was mixed in favor of the longer maturity but not unusually weak, however, with non-dealers taking down 40 percent of the $39 billion 3-month offering, their smallest share since June 19, and 55 percent of the $33 billion offered in the 6-month, their largest share since June 5. At 1.040 percent for the 3-month and 1.125 percent for the 6-month, the high discount rates were a half of a basis lower than last week.

Definition
Treasury bills are sold at public auctions every week. The 3-month bill is also known as the 13-week bill. Competitive bids at these auctions determine the interest rate paid on each issue. A group of securities dealers, known as primary dealers, are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold the bills, resell the bills to their clients or trade them with other securities firms. Typically, the New York Fed approves about 20 securities firms to be primary dealers but that number dropped sharply during the 2008 financial crisis as some were merged into other firms or went bankrupt. The Fed has been rebuilding that number regularly and the latest list can be found here. Since these are public auctions, the Treasury must announce the size, date and time of the auction every week. Three-month bills are announced on Thursday for auction the following Monday and are issued (settled) on Thursday. If a Monday is a banking holiday, the bills are auctioned on Tuesday. (Department of the Treasury)  Why Investors Care
 
[Chart]

Data Source: Haver Analytics
 
[Chart]
The 3-month bill rate is usually similar to the federal funds rate target; often when bond investors expect a rising rate environment, it is higher than the funds rate, but when investors expect rates to decline, it will be lower than the funds rate target. The 3-month bill rate depicted in this chart represents the high discount rate from the Treasury's weekly auction on Mondays. It only represents one moment in time, and is not an average of daily numbers. The date on the chart is associated with the issue (or settlement) date of the Treasury security, which is on the Thursday of the week that the security is auctioned. Our grid tables show the auction date of the security, which is usually on Mondays.
Data Source: Haver Analytics
 

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