A flood of short-dated Treasury securities will make this week the busiest issuance week ever as the government raises $294B with sales of bills and notes.
Record high issuance has raised unsecured borrowing costs as seen with an explosion in dollar Libor spreads, which are nearing global financial crisis highs.
“These larger auctions are more difficult to digest,” said Thomas Simons, a money-market economist at Jefferies. “But the auctions do OK when they have a concession. It’s even more necessary than it was in the past.”
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