2017 Economic Calendar
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3-Month Bill Auction  
Released On 3/6/2017 11:30:00 AM For 3/6/2017 11:30:00 AM
Auction Results
Total Amount$30 B 
Bid/Cover3.22 
3-Month Bill Treasury Rate0.745% 

Highlights
Coverage was mixed for Monday's T-bill auctions, matching the lowest of the year for the 3-month at 3.22 and near the top of the year's range for the 6-month at 3.72. End investors preferred the 3-month despite the weak coverage, however, with non-dealers taking down a respectable 40 percent of the $30 billion offering, while the non-dealer takedown for the $24 billion 6-month offering was a mere 31 percent, the smallest this year. The high discount rates jumped higher, reflecting expectations of a 25 basis point rate hike at the upcoming FOMC meeting following last week's hawkish Fedspeak, with the 3-month rate up 23 basis points from last week to 0.745 percent and the 6-month up 16.5 basis points to 0.835 percent.

Definition
Treasury bills are sold at public auctions every week. The 3-month bill is also known as the 13-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. Three-month bills are announced on Thursday for auction the following Monday and are 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 3-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 3-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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