2017 Economic Calendar
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6-Month Bill Auction  
Released On 5/1/2017 11:30:00 AM For 5/1/2017 11:30:00 AM
Auction Results
Total Amount$33 B 
Bid/Cover3.25 
6-Month Bill Treasury Rate0.975% 

Highlights
Coverage was mixed for Monday's T-bill auctions, at 3.03 the lowest of the year for the 3-month and at 3.25 for the 6-month still soft but on par with the weaker coverage seen since February. End investors appear to have shunned the shorter maturity, with non-dealers taking down only 26 percent of the $39 billion offering, the smallest share since February 6. Preferring the longer maturity 6-month, non-dealers took down a still weakish 44 percent of the $33 billion issue, though this is in line with the average for this year. The awarded high discount rates edged higher, up 2.5 basis points at 0.845 percent for the 3-month and up 2 basis points to 0.975 percent for the 6-month. Although these are the highest high discount rates since 2009, the level indicates market participants have ruled out a hike in the Fed Funds target range by the FOMC at its meeting this week, a reasonable conclusion given recent data showing weakness in consumer spending.

Definition
Treasury bills are sold at public auctions every week. The 6-month bill is also known as the 26- 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. Six-month bills are announced on Thursday for auction the following Monday and 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 6-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 6-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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