The SIFMA Quarterly Issuance Survey forecasts total net Treasury bill, note and bond issuance to be $362.0 billion in the third quarter of 2011, almost double the net $189.73 billion issued (and 18 percent above the $$307.0 billion previously forecast in SIFMA’s 2Q’11 issuance survey ) in the second quarter of 2011 (actuals include cash management balances). Notably, 52-week bills issuance is expected to drop roughly 25 percent below 2Q’11 levels.

Excluding cash management bills (CMBs), total net issuance stood at $169.7 billion in 2Q’11, 54 percent above $110.2 billion in the prior quarter. After a significant drop in CMBs issuance in 1Q’11, the use of short-term CMBs dropped further to $20.0 billion in 2Q’11. The monthly issuance of $0, $5, and $15 billion of short-term CMBs in April, May, and June 2011, respectively, marked the lowest monthly issuance since January 2010.

The total second quarter net issuance of $189.73 billion was about 34 percent higher than Treasury’s May borrowing estimate of $142 billion for the second quarter of 2011. However, the $362.0 billion forecast for third quarter by survey participants is over 10 percent below Treasury’s May estimate of $405 billion.

About the Report

A quarterly survey of SIFMA’s Primary Dealers and Government Securities Research and Strategist Committees concerning U.S. government issuance and rates forecasts. The committees are composed of trading strategists and research analysts at SIFMA member firms who specialize in the U.S. government and agency securities markets. The survey is intended to provide market participants with the current consensus expectations and median forecasts of many of the primary dealers and other firms active in the U.S. government and agency securities markets.

Credits

SIFMA Capital Markets

• Staff Advisor: Rob Toomey

SIFMA Research

• Research Analyst: Justyna Podziemska