2017 Economic Calendar
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4-Week Bill Auction  
Released On 9/5/2017 1:00:00 PM For 9/5/2017 1:00:00 PM
Auction Results
Total Amount$20 B 
4-Week Bill Treasury Rate1.300% 

Coverage, at 3.04, was soft for the weekly 4-week T-bill auction, amid end investor demand so weak that even the smallest auction size of the year failed to boost the statistics, with non-dealers taking down just 41 percent of the $20 billion offering, their smallest share since August 8. The awarded 1.300 percent high discount rate was a sharp 34 basis points above last week's rate, as market participants demanded compensation for the risk of a Treasury auction shutdown, and the inability to roll-over their money market investment funds, if Congress does not lift the debt ceiling by September 29. To straddle the period in which the Treasury's borrowing may be disallowed, many money market investors extended the duration of their investment to the 3-month and the 6-month T-bills, while sacrificing the 4-week's yield premium in the process. The resulting inversion in the short-end of the T-bill yield curve can be seen in the comparison with this morning's t-bill auction results, where the 3-month high discount rate was 28 basis points below this afternoon's 4-week auction high discount rate.

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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