The demand for public treasury bills triples the offer in today’s auction
He Public treasure has placed this tuesday 1,853.15 million euros in a bill auction at 3 and 9 monthsin the midrange expected and it has done so by remunerating investors with higher interests in both benchmarks and reaching exceed the 3% threshold in 9-month billsaccording to data published by the Bank of Spain and collected by Europa Press.
At a time when individual investors are showing great interest in the purchase of this type of debt given its high profitabilitywhich has been growing since the beginning of 2022, the demand in this auction has exceeded 6,099 million euros, more than triple the amount finally awarded.
Specifically, the body under the Ministry of Public Affairs Economics and Digital Transformation has placed 553.15 million euros in three-month bills, compared to a demand of 1,748.84 million, and the marginal interest rate has been placed at 2.670%, above the 2.520% of the previous auction in February and reaching its highest level since November 2011.
In bills to nine months, the Treasury has placed 1,300 millionbelow the 4,350.82 million requested by investors, with a marginal return of 3.034% above the previous 2.973%, and standing at its highest level recorded, taking into account that this reference was launched in February 2013.
After the broadcast of this Tuesdaythe Treasury will celebrate next Thursday an auction of government bonds, in which the public body expects to award between 5,500 million and 6,500 million euros. Specifically, in this last March issue, the Treasury will auction State bonds with a residual life of 4 years 10 months, with a 0.00% coupon; 10-year State Obligations, with a 3.15% coupon; and 30-year State Obligations, with a 1.90% coupon.
The marginal referrals are 2.633% for State obligations with a residual life of 4 years 10 months; 3.773% for 10-year State obligations and 3.346% for 30-year State obligations. All this in a context marked by the successive rises of interest rates by both the Fed and the European Central Bank. In fact, the last decision adopted by the Governing Council of the European Central Bank (ECB) was to raise interest rates by 50 basis points, so that the interest rate for its refinancing operations will stand at 3%, while that the deposit rate will reach 2.50% and the loan facility rate will reach 3.25%.
But the high level of underlying inflation in the euro area, which discounts the volatility of energy and food prices, suggests that it will be necessary to continue raising interest rates beyond the meeting on Thursday, March 16. as recently pointed out by Philip Lane, executive of the European Central Bank (ECB) and chief economist of the institution.
Treasury targets for 2023
The gross issuance by the Public Treasury this year will be 256.930 million euros, which represents an increase of 8.2% compared to the estimate for this year, due to the rise in interest rates. For its part, the net indebtedness of the Public Treasury in 2023 will remain at 70,000 million. Breaking down by type of instrument, the Treasury Bills are expected to provide net negative financing of 5,000 million, so the State bonds and obligations, together with the rest of the debts in euros and foreign currency, will contribute the remaining 75,000 million.