In my weekend article, I estimated a yield of 3.70% – 3.80% for the upcoming 6-month T-Bills auction.
Well, the auction results are out at 3.70% cut off yield, right on the bottom of my projected range.
To be fair though, latest US economic data came in slower than expected, raising market hopes for 2 interest rate cuts in 2024.
So this would have impacted T-Bills yields on the downside.
At the same time – T-Bills demand jumped to record highs at $16.3 billion (vs $14.4 billion the previous auction).
This is the highest T-Bills demand we have seen since 2022.
Let’s take a deeper look at the numbers.
6-month T-Bills yields drop to 3.70% (9 May 2024 Auction Results)
I’ve extracted the cut-off yield for the latest T-Bills auction below.
This round of 6-month T-Bills are issued at 3.70% yield (a drop from 3.74% the previous auction).
This is charted in graph form below.
You can also see how T-Bills yields have generally stabilised around the 3.7 – 3.8% range the past 6 auctions.
However – there does look to be a downtrend in place for the past 3 T-Bills auctions.
Demand for T-Bills jumps back up to record highs at $16.3 billion (from $14.4 billion the last auction)
Demand for T-Bills jumps back up to record highs.
We’re seeing a massive $16.3 billion in T-Bills applications, which is up 13% from the previous auction ($14.4 billion).
Charted below, you can see how T-Bills demand has gone back up to record highs since 2002.
This is especially after the sharp drop in demand the past auction.
Given the fact that banks are cutting interest rates across the board, I suppose this isn’t that surprising.
While