US quarterly financing $776 billion in October-December period

<p>I believed expectations for this number were for $863 billion, so if so that's considerably lower, though I would be careful with that.</p><ul><li>Expects to borrow $816 billion in Jan-March period</li><li>Will maintain cash balance of $750 billion in both quarters</li><li>In July-Sept quarter, borrowed $1.010 trillion and ended quarter with cash balance of $657 billion</li></ul><p>This could be something of a trick with the headline as money was moved from the borrowing number to the cash balance number. Ultimately, both of those will need to financed by selling bonds.</p><p>US 10-year yields are lower on the announcement.</p><p>On Wednesday at 8:30 am ET, the Treasury will announce the tenor of the borrowing, with some expectations pointing towards more weighting towards T-bills. That will be a market mover.</p><p>This was from BMO last week:</p><blockquote>"Bond bubble has popped; post-bubble price action sideways, in big, fat trading range – see Japan ‘89, internet ‘00, homebuilders ‘05, China ‘07; there will be rallies but likely no secular bond bull till D.C. serious about fiscal discipline … We think ‘hard landing’ probability higher than consensus 30%, and say ‘sell the last rate hike’ in inflationary backdrop (as higher-for-longer rates required to tame inflation)”.</blockquote><p>The dollar is lower alongside yields after this announcement.</p>

This article was written by Adam Button at www.forexlive.com.