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Economic Indicators Released Overnight
Not much data to digest yesterday but 4 treasury auctions in one day bring into focus the sheer volume of issuance just about to hit the street. Right on time, the US Treasury updated guidance for Q3 2025.
Here’s the latest on the U.S. Treasury’s borrowing estimate for the July – September 2025 quarter:
The Treasury now expects to borrow approximately $1.007 trillion in privately‑held net marketable debt in Q3 2025, a marked increase from its earlier estimate of $554 billion announced in April 2025. This upward revision reflects a significantly lower starting cash balance and diminished projected net cash flows.
The revised estimate closely aligns with financial institutions' projections such as those from J.P. Morgan, Deutsche Bank, and Citi.
As of July 3, 2025, the Treasury’s cash reserves stood at just $313 billion—about half of what they were a year earlier—prompting the adjustment to the borrowing outlook.
What this means
With more than $1 trillion in debt issuance planned, investors are bracing for heavier reliance on short-term Treasury bills (T‑bills) to meet funding needs. Demand is expected to be robust, notably from money-market funds, which hold over $7 trillion in assets.
The Treasury appears intent on maintaining its current debt issuance structure, avoiding sizeable additions to long-term coupon-bearing bonds—at least for now. Analysts expect long-term issuance may rise only around 2026–2027.
Recent moves by the Treasury under Secretary Scott Bessent emphasise short-term borrowing, likely as a strategic response to high long-term yields and to avoid locking in elevated interest rates for extended periods.
Wall Street braces for deluge of Treasury bills, a crucial test of market demand [MarketWatch]
NASDAQ and S&P made new highs but momentum is low and The Street seems unwilling to participate at these levels.
US Equities
Bank of England poised to slow QT after rise in yields [FT]
Another failed breakout, like Gold and Silver. That shooting star is still in control of price action.
Gold returns to the buy zone but really it's a horizontal wedge between $3,295 and $3,415 currently. The attempted rally yesterday didn't last long suggesting short term weakness.
EURO. Classic breakdown and then retrace to the scene of the crime before rejection lower. Consolidation below 1.1585 would be very bearish.
Tesla back to the support trend as breakdown hasn't confirmed.
TESLA Daily
We were looking for a move to the lower end of the channel for the 30 year (and 10 year) Chinese Government bond yield but move seems to be higher for now.
China 30 Year Government Bond Yield Daily