Treasury refunding focus shifts to buyback pace, auction sizes seen steady

Ahead of the U.S. Treasury's quarterly refunding announcement this week, SanJac Alpha CIO Andrew Wells expects coupon auction sizes to stay unchanged, with the focus on whether the Treasury extends its increased long-dated bond buyback auctions beyond Nov. 4. Wells sees continued buybacks as a willingness to provide liquidity support for older long-dated bonds. J.P. Morgan also expects the Treasury to leave forward guidance and auction sizes unchanged, though it sees risk skewed toward cutting longer-term auction sizes. Separately, Macquarie's Thierry Wizman assigns an 80% probability of a Bank of Japan rate hike in December, 66% for the ECB, and 50% for the Fed. Barclays flags continued pressure on China's factory activity from the property downturn and fiscal constraints, with October PMI data showing manufacturing and construction back in contraction. Australia's auction clearance rat