In my weekend article, I estimated a yield of 3.70% – 3.80% for the upcoming 6-month T-Bills auction.
The auction results are out at 3.70% cut off yield, at the bottom end of my projected range.
But look under the surface and it doesn’t look great – demand continues to go up, while bidding data indicates lowball bids being submitted from investors.
If this continues it suggests that T-Bills yields may trend lower going forward.
Let’s take a closer look at auction numbers.
6-month T-Bills yields drop to 3.70% (4 July 2024 Auction Results)
The cut-off yield for the latest T-Bills auction is set out below.
This round of 6-month T-Bills is issued at 3.70% yield.
Note that this is down from 3.74% in the previous auction.
T-Bills yields since Jan 2023 are charted in graph form below.
You can see how with the past 3 auctions, T-Bills have generally settled into the 3.7 – 3.8% range.
However, there is a clear downtrend in the past 3 auctions.
And with the most recent auction, T-Bills have fallen to 3.70%, which is right at the bottom of this range.
Demand for T-Bills rises to $15.6 billion (vs $15.5 billion the last auction)
Demand for T-Bills this auction came in at $15.6 billion.
This is only slightly higher than the $15.5 billion we saw in the previous auction.
You can see this charted below – T-Bills demand is close to the highest it has been in the past 18 months.
Which frankly, is not surprising given that other alternatives such as bank fixed deposit rates keep falling.
However, not a good sign if you’re hoping for higher T-Bills yields.
Auction amount for T-Bills dropped to $6.5 billion (vs $6.6 billion
