U.S. T-Bill Auctions May Tip U.S. FED’s Hand

Posted Monday, September 11, 2017 by
Shain Vernier • 2 min read

This month’s FOMC meeting has the potential shake up the U.S. equities and global currency markets. Chairperson Yellen’s interest rate announcement scheduled for September 20th may act as a catalyst for many fundamental changes in the markets. The implementation of a comprehensive trading approach can be of great value interpreting the actions of Central Banks.

FOMC meeting roomThe FOMC Conference Room Is Empty For Now, But That Is About To Change


The FED entered its standard “blackout period” last Saturday, meaning that none of the members will be permitted to speak with the media. So, looking for hints regarding the coming monetary policy decision is up to us.


U.S. Treasury Bill Auctions

U.S. T-bill auctions are not typically market movers, but they do provide some useful information. It is important to remember that the participants in these auctions are largely institutional. Balancing debt obligations or hedging systemic risk are key functions these T-bill auctions provide.

Today’s slate gives us a few notable auctions:

  • 3-month T-bill Auction: 1.035%, up from 1.020%

  • 6-month T-bill Auction: 1.140% up from 1.115%

  • 3-Year Note Auction: Later today, 1:00 PM EST


Overview: The yields are the important part of these auctions. Increasing yields will attract investors and may be signs of coming FED policy moves. From these stats, It looks like the short-term debt market is hungry for participation.

Heavy action in these auctions also shows us that bond traders are moving into U.S. debt as an attractive short-term investment alternative. This can be seen as a risk-off approach, as institutions attempt to hedge open positions and weather a coming storm.

The growth in today's bond auction yields is a subtle hint that the big money players are betting on a September 20 rate hike from the FED.

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