Money markets us bill rates fall as supply matures

← Homepage

* About $48 bln T-bills said to be repaid Thursday* Overnight repo rates fall in line with T-bill rates* U.S. to sell $30 bln 3-month bills, $28 bln 6-month billsBy Richard LeongNEW YORK, April 19 Interest rates on U.S. Treasury bills fell on Thursday as a large amount of the notes were set to mature, spurring short-term investors to scoop up the remaining supply in the open market. Treasury bill rates due on Thursday through early June were down 0.3 to 2.2 basis points in late trading.

About $48 billion of T-bills are expected to be paid down by the Treasury Department on Thursday, according to analysts. With more cash in hand and fewer Treasury bills available, investors sought to park more money in repurchase agreements and federal funds. This helped to drive down the interest rates on these short-term loans, analysts and traders said.

However, the decline in T-bill supply was mitigated by the Federal Reserve's $400 billion "Operation Twist" program, in which the central bank sells its short-dated Treasury holdings and buys longer-dated debt issues in an effort to hold long-term interest rates."The drop in T-bill supply has not been quite as large as it could have been, and even then supply is still supported by Operation Twist and regular issuance," said Tom Sapio, head of repo sales and trading at Cantor Fitzgerald in New York. This means T-bill and repo rates could fall a few more basis points, particularly toward to the end of the quarter, but any further drop in rates "shouldn't be quite as extreme as in certain periods in recent years," Sapio said.

On Thursday, the Treasury Department said it will sell $30 billion in three-month bills and $28 billion in six-month bills next Monday, matching the amounts sold earlier this week. In March, the Treasury began paring its weekly issuance during its annual period of personal income tax collection. At that time, it was selling $33 billion in three-month bills and $31 billion in six-month bills on a weekly basis. Overnight repo rates fell in tandem with lower T-bill rates. They slipped to about 0.13 percent mid-market, down from 0.17 percent late on Wednesday.

The professional company appspy provides all the information on spy facebook messages.