2017 Economic Calendar
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4-Week Bill Auction  
Released On 3/21/2017 11:30:00 AM For 3/21/2017 11:30:00 AM
Auction Results
Total Amount$55 B 
Bid/Cover3.17 
4-Week Bill Treasury Rate0.745% 

Highlights
Coverage, at 3.17, was the softest since December for the weekly 4-week T-bill, but demand from end investors was nevertheless quite strong, judging from the above average 45 percent non-dealer takedown. Indirect bidders, one indicator of foreign demand, were once again strongly represented though somewhat less so than in the previous auction, taking down an above average 34 percent of the $55 billion offering. The high discount rate of 0.745 percent was 2.5 basis points below last week's pre-rate-hike auction rate, reflecting a general drift down in the yield curve since Fed Chair Janet Yellen's less-than-hawkish conference following the rate hike announcement.

Definition
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
 
[Chart]

Data Source: Haver Analytics
 
[Chart]
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 rated 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 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 Tuesdays.
Data Source: Haver Analytics
 

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