Treasury Department Set to Announce Bonds and Notes Issuance

The Treasury Department is preparing to reveal the size of the bonds and notes it plans to issue in the coming months. This announcement holds the potential to greatly influence the direction of yields in the near future.

Quarterly Refunding Statement and Webcast

At 8:30 a.m., the Treasury will release its Quarterly Refunding Statement, which will be followed by a webcast press conference. These events aim to provide further insight into the Treasury's plans.

Impact on Yields and Returns

In a recent statement, the Treasury disclosed the dollar amount it intends to issue over the next three months. However, this upcoming analysis will outline the specific distribution of medium- to long-term bonds that will undergo auction in the coming months. The balance between supply in the long end of the curve compared to the short-end or Treasury bills could have an impact on yields or returns for longer-dated Treasuries. Consequently, this may influence the value of bonds that investors already hold. Furthermore, corporate debt, which is typically priced at a "spread" to Treasuries, could also be affected.

Current Yield Figures

Prior to the official announcement, the yield on the 10-year Treasury reached a 16-year high of 4.987% on October 19, but has since risen slightly, up 0.028 percentage point to 4.903% at 7:49 a.m. Additionally, the 30-year yield currently stands at 5.06%.

Implications for Stock Investors

Stock investors will also be closely monitoring these developments due to the recent negative impact higher yields have had on stock markets. This upward trend in yields has resulted in a market correction for the S&P 500. As a result, S&P 500 futures have declined by 0.4%, with Dow Jones Industrial Average futures falling by 0.3%.