Demand jumps, yields drop at three-month T-bill auction

Despite three-fold subscription, the Government Debt Management Agency (ÁKK) sold the planned HUF 50 billion of three-month discount T-bills at its weekly auction on Tuesday. Yields dropped sharply from the previous auction and were slightly below the respective secondary market benchmark. Pushing yields lower could have been a priority over raising the volume. ÁKK sold the planned HUF 50 billion of the bills expiring on July 17. It kept sales at the planned level for the fourth auction in a row after raising them on high demand at the previous four auctions. Bids totalled HUF 152.2 billion, doubling from HUF 75.7 billion on April 2. Strong demand returned after dipping under the HUF 100 billion mark on March 19. Average yield at the auction was 4.44%, 2bp under the secondary market benchmark, calculated on a bill maturing one week later, and fell 28bp from the previous auction of the bills one week earlier. Yields ranged between 4.41% and 4.49%.