May 30, 2017 / 6:02 PM / 6 months ago

U.S. 1-month T-bill sale dinged in heavy supply

NEW YORK, May 30 (Reuters) - Investors on Tuesday gave a cold shoulder to the latest supply of U.S. one-month Treasury bills as the government offered $142 billion worth of short-term debt.

The ratio of bids to the amount of one-month bills offered was 2.68, which was the lowest since March 31, 2009. This gauge of overall auction demand was 2.85 a week ago, Treasury data showed.

The weak bidding resulted in the Treasury to pay investors an interest rate of 0.840 percent on the one-month issue, which was the highest on this maturity at an auction since Sept. 30, 2008, when it was 1.010 percent.

Direct and indirect bidders “received everything they bid for, which is additional testimony to how weak demand was for this auction,” Jefferies’ senior money market economist Tom Simons wrote in a note on the one-month auction.

The latest one-month issue will mature on June 29, about two weeks after the Federal Reserve’s June 13-14 policy meeting where traders widely expect policy-makers would raise interest rates by a quarter point to 1.00 percent to 1.25 percent.

In the secondary market, actively traded one-month T-bills were last quoted at an interest rate of 0.7216 percent, down 1 basis point from late on Friday, Reuters data showed.

In addition to the one-month auction, the Treasury Department on Tuesday sold $25 billion of 14-day cash management bills; $39 billion of three-month bills and $33 billion of six-month bills.

The demand for these other T-bill maturities was stronger than the one-month supply. (Reporting by Richard Leong; Editing by Jonathan Oatis)

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