2017 Economic Calendar
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4-Week Bill Auction  
Released On 5/2/2017 11:30:00 AM For 5/2/2017 11:30:00 AM
Auction Results
Total Amount$55 B 
4-Week Bill Treasury Rate0.725% 

Coverage, at 2.99, was very soft for the weekly 4-week T-bill auction, the first time since at least the beginning of last year that the reading was below 3.00 for the bill with the shortest maturity, which tends to have higher coverage ratios than longer-term Treasury securities. End investors were scarce, with non-dealers taking down just 36 percent of the $55 billion offering, their smallest share since December. The high discount rate crept 1 basis point lower from last week to 0.725 percent, and was down 4.5 basis points from the long-term peak set in the March 14 auction. As in yesterday's bill auctions, the rate indicates that market participants have ruled out a decision to hike the Fed Funds rate at this week's FOMC meeting.

Treasury bills are sold at public auctions every week. 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. Four-week bills are announced on Monday for a Tuesday auction and are issued (settled) on Thursday of the same week. If a Monday is a banking holiday, the bills are auctioned on Wednesday. (Department of the Treasury)  Why Investors Care

Data Source: Haver Analytics
The 4-week note was instituted to replace the necessity for sporadic cash management bills. This weekly auction is more predictable for investors. Predictability in the Treasury market is a highly rate feature that promotes demand for these bills. The 4-week bill rate depicted in this chart represents the high discount rate from the Treasury's weekly auction on Tuesdays. It only represents one moment in time, and is not an average of daily numbers. The dates on the chart and the grid are the auction dates of the security, which are usually on Tuesdays.
Data Source: Haver Analytics

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