Treasury Bills lower their profitability to 3.63%, June lows, after the ECB pause

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The Public Treasury has carried out the first auction of the month of November with six and twelve month securities and it is also the first time that it has gone out to the market to measure the pulse of investors after the European Central Bank (ECB) announced a pause in raising interest rates in this new cycle. And it has had its effect on the longest stretch of debt, perhaps reflecting that the pause will last over time or that there could even be reductions a year from now.

After two consecutive months of increase in profitability, the return required on twelve-month Treasury Bills (the most popular among investors) falls again and It is at the lowest level of last June, up to a marginal rate of 3.63%. In total, the institution has placed 3,269 million euros, of which almost a third has gone into the hands of individuals. Non-competitive requests timidly exceed 1,000 million euros. Demand, once, has been much higher than supply, demonstrating that the investment appetite is still present. In total, twelve-month bills have been requested for an amount of 6,519.9 million euros, twice the amount awarded.

The profitability of Treasury Bills maturing in one year has seen its profitability fall from the previous 3.876%, which was its highest figure in eleven years.

In the case of six-month public debt securities, the public body has placed 1,002 million euros, facing a demand that has exceeded 2,700 million euros. Spanish families and individuals have kept 60% of the issue, with a total of 613 million euros. In its case, the required profitability of the public debt has stood at 3.747%, above the twelve-month bills, although it also falls compared to the previous October auction when it exceeded the level of 3.8%.

According to data published by the Bank of Spain, until August Families held almost 29% of the total amount of Letters in circulation, worth 20,348 million euros. Since July 2022, when the European Central Bank carried out the first interest rate increase in a decade, individuals had 25 million euros in bills in their hands, 0.03% of the total issued by the public body. Thirteen months later they have multiplied this amount by 813 times and have become the first holder for the first time in history.

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