The U.S. Treasury supports the dollar

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The U.S. Treasury continues to pump up the global debt market for its securities, borrowing money for the implementation of the economic program of the White house. This week the Ministry of Finance is preparing to sell securities with a total weight of $265 billion, which will be a record of simultaneous release of the debt for eight years. Among government securities, preparing for placement, there are bonds with a maturity of 2 years ($33 billion), 5 years ($36 billion), 7 years ($30 billion). Another $150 billion will be placed short-term notes.
Peaks locations are to be held on two dates at the end of the month: on may 25, this coming Friday, on may 31.
In fact, the U.S. Treasury is engaged in the absorption of dollar liquidity for six months – from November 2017. Then, the office after a break beginning to offer promissory notes of various maturity for large sums, but the market is occupied by other factors, this long to notice.
Simultaneously, in the autumn of last year, the fed began to sell on its balance sheet the assets accumulated over the years of stimulations. Current information on new issues of government securities only confirms the overall strategy of the financial authorities of the United States.
For the currency market, this could mean additional support for the dollar, which is quite expensive. Notice how the rally develops in the ten-year UST yield today it is a 3.05% despite the fact that last week the yield reached to 3.12% and can quickly return to normal movement.
The ruble in recent weeks, sensitive to the behavior of grinbek more than to fluctuations in the price of oil, therefore we can not exclude the return of the dollar/ruble in the coming weeks in the area of 63.00-64,00 RUB Until the Russian currency stabilizes planned tax period and expensive raw materials, but as soon as one of these factors will be excluded, to the forefront of the will be additional catalysts and will allow the ruble to weaken.
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Anna Bodrova,
Senior analyst,
Alpari