The U.S. Treasury will issue approximately $153 billion in government bonds on October 6, 2026, consisting of $95 billion in 6-month Treasury bills and $58 billion in 3-year notes. The 3-year notes are new issues, with a settlement date of October 15.

On the same day, there will be a 6-month auction at 11:30 AM, a 3-year auction at 1 PM, and a maximum of $4 billion in coupon bond repurchases at 2 PM. The repurchase targets bonds maturing between October 2028 and September 2029. A $39 billion 10-year and a $22 billion 30-year bond will be issued on October 7 and 8, respectively, both as reopenings, with a total of $119 billion in medium to long-term bonds also settling on October 15.

Pre-auction yields are significantly higher than the last round. The 3-year yield is about 4.957%, compared to the last round's highest bid yield of 4.474%, an increase of about 48 basis points. The 10-year yield is about 5.300%, up from 4.834% in the last round. The 30-year yield is about 5.660%, compared to 5.308% previously. The curve has flattened, with the front end and belly giving the most.

The bid-to-cover ratio for the last 3-year auction was 2.72 times, with an average of 2.65 times over six auctions. The tail was negative 0.1 basis points, with an average of negative 0.3 basis points over six auctions. Primary dealers took 10.9%, and direct bidders took 26.9%. These are old results, not today's bids.

The Treasury estimates that net marketable borrowing held by the private sector from October to December will be $628 billion. Short-term debt continues to roll weekly. The latest investment rates for 4-week, 6-week, 26-week, and 52-week bills are 3.956%, 4.044%, 4.314% (sold on October 5), and 4.616%, respectively. In the past 30 days, short-term debt auctions totaled about $22.4 trillion over 27 sessions.

The seller is the Treasury, while buyers include money market funds, banks, and foreign official accounts that need to absorb the short end, as well as bond funds that need to reprice the 3-year notes. The event is driven by the increased rollover of maturing debt and large new issuances, not temporary additions. Beneficiaries are buyers locking in close to 5% for the 3-year notes. Those under pressure are holders of old bonds facing a yield increase from 4.474% to 4.957%, as well as primary dealers who will also need to take on 10-year and 30-year bonds in the same week. The repurchase of up to $4 billion does not offset the $153 billion supply.

Source: Public Information