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16 minutes ago
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US Treasury keeps notes, bonds auction sizes steady, increases debt buybacks
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) -The U.S. Treasury Department said on Wednesday it does not anticipate increasing auction sizes for notes and bonds for at least the next several quarters, in line with market expectations, as it announced a $125 billion refunding from August to October 2025. It will, however, continue to make incremental increases to the size of Treasury Inflation-Protected Securities (TIPS) and T-bill auctions. "We use T-bills as a shock absorber for unexpected, seasonal or short term variations in borrowing needs as part of our regular and predictable issuance plan," a senior Treasury official said in a call with reporters on Wednesday. "That's because we believe ... changes in borrowing needs and addressing them in the people market is the most effective way to borrow at the least cost over time because of the ability of that market to absorb those kind of short-term changes. We think that the level of bill issuance offered today is very consistent with those plans and has helped us in light of the changes." In a statement, department will further sell $58 billion in U.S. three-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds next week. These were the same auction sizes for the same securities announced at the February refunding. The Treasury also announced it will double the frequency of long-end nominal buybacks and increase the size of cash management buybacks, all aimed at improving liquidity in the market. The changes to the buybacks will take effect on August 13. "The Treasury will be focusing more on bill supply and they are trying to help market liquidity by increasing the sizes and frequency of buybacks, especially in the long end of the curve," said Gennadiy Goldberg, head of U.S. rates strategy, at TD Securities in New York. "So net net, this should be slightly positive for the long end." Long-dated Treasuries briefly rallied after the refunding announcement, pushing their yields lower. But their yields were last higher on the day as the initial impact from the refunding was muddied by the strong U.S. gross domestic product number. U.S. 10-year yields were last up 4.4 basis points at 4.372%. The Treasury announced that it's increasing the frequency of liquidity support buybacks in both the 10- to 20-year and 20- to 30-year nominal buckets to four times per quarter from two currently. But it will keep the current $2 billion maximum purchase per operation in both sectors. With respect to the other nominal coupon pairs, the department will continue to conduct one liquidity support operation per quarter for up to $4 billion. All told, the changes will lift total size of liquidity support buybacks from a maximum par amount of $30 billion per quarter to $38 billion. CASH MANAGEMENT BUYBACKS The Treasury is also increasing the size of cash management buybacks from a maximum $120 billion per year to $150 billion. For this quarter, however, it does not expect conducting cash management buybacks around the September tax date due to the ongoing rebuilding of the Treasury's cash balance. Cash management buybacks will resume in December, the Treasury said. Overall, the Treasury's financing plan will refund about $89.8 billion of privately-held Treasury notes and bonds maturing on August 15 and raise new cash of $35.2 billion from private investors. The Treasury also stressed the focus on T-bill issuance this quarter. It expects further marginal increases in T-bill auction sizes in coming days and then maintaining sizes at or near those levels through the end of September. It added that further increases in T-bill auction sizes are anticipated in October. "This guidance (on T-bill issuance) will continue to be the focal point of future refunding announcements," wrote Tom Simons, chief economist at Jefferies in a research note. "(Treasury) Secretary (Scott) Bessent has made it clear that he is carefully considering the best strategy and timing for terming out the debt versus continuing to lean on the front-end. At some point, perhaps after a few Fed (Federal Reserve) rate cuts, issuance of more coupons will be more attractive." Median forecasts from primary dealers estimated that Treasury could increase bill supply by $260 billion over a month and by $600 billion over a quarter without causing significant price deviations in bills relative to fair value, according to minutes of the meeting on Tuesday of the Treasury Borrowing Advisory Committee released on Wednesday. With respect to TIPS, Treasury plans to maintain the 30-year TIPS reopening auction size at $8 billion for August, increase the 10-year TIPS reopening auction size to $19 billion in September, and increase the October 5-year TIPS new issue auction size to $26 billion.
Yahoo
16 minutes ago
- Yahoo
Top Stock Movers Now: Humana, Hershey, VF Corp., and More
Key Takeaways U.S. equities were mixed at midday with the market reacting to a strong report on the U.S. economy while awaiting the Federal Reserve's interest rate decision. Humana now expects a smaller decline in Medicare Advantage memberships that previously anticipated. Mondelez International said skyrocketing cocoa prices will hurt earnings.U.S. equities were mixed at midday as the market responded to the U.S. economy growing more than expected in the second quarter while waiting for today's decision by the Federal Reserve on interest rates. The S&P 500 and Nasdaq gained, but the Dow Jones Industrial Average fell. Humana (HUM) shares advanced after the health insurer boosted its guidance and reported better-than-expected results as it sees a smaller decline in Medicare Advantage membership this year than previously believed. Shares of Hershey (HSY) rose when the chocolate, candy, and snacks maker also beat profit and sales estimates on high Easter and pre-Halloween demand for its treats. VF Corp. (VFC) shares took off after the parent of North Face, Vans, and Timberland brands surprised analysts with flat revenue and a smaller loss, raising confidence the company's turnaround plan is working. Old Dominion Freight Lines (ODFL) shares were driven down when the freight delivery firm missed earnings and revenue forecasts, which it blamed on ongoing softness in the U.S. economy. U.S.-listed shares of Novo Nordisk (NVO) continued their slide on a downgrade from Bank of America. That came after the drugmaker warned about weakening sales of its blockbuster weight-loss drug, Wegovy, and named a new CEO. Mondelez International (MDLZ) shares declined when the maker of Oreo Cookies and Ritz Crackers posted a drop in North American sales and said profits will be hurt by the soaring price of cocoa. Oil and gold futures climbed. The yield on the 10-year Treasury note moved higher. The U.S. dollar was up on the euro, pound, and yen. Trading in most major cryptocurrencies was higher. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16 minutes ago
- Yahoo
JPMorgan Raises PT on PagSeguro Digital Ltd. (PAGS) from $12 to $13; Maintains ‘Neutral' Rating
Offering strong upside potential, PagSeguro Digital Ltd. (NYSE:PAGS) earns a spot on our list of the . On July 16, 2025, JPMorgan increased its price target on PagSeguro Digital Ltd. (NYSE:PAGS) from $12 to $13, maintaining a 'Neutral' rating. The analyst expects the company to achieve the high end of its 11-15% EPS growth guidance. The analyst maintains the same trend from February, when the target was lifted from $11. The continued optimism is driven by the company's efforts to reprice products, reduce financial costs, and manage costs amid macroeconomic uncertainty. The analyst's discussions with PagSeguro Digital Ltd. (NYSE:PAGS)'s management revealed a strategic focus on margin improvements and diversification, particularly within its banking segment. This banking segment now accounts for 20% of the company's gross profit. Meanwhile, the company's credit segment is expected to drive its future growth. With the stock trading at a low valuation and expectations of a 15% return on equity (ROE), the analyst projects a strong outlook for PAGS. PagSeguro Digital Ltd. (NYSE:PAGS), a Brazilian fintech company, offers financial and payment solutions for a diverse range of customers. It remains on our list of the most undervalued stocks. While we acknowledge the potential of PAGS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 11 Most Undervalued Cloud Stocks Under $10 According to Hedge Funds and 11 Best Mineral Stocks to Buy According to Hedge Funds. Disclosure: None.
