US to sell USD 72bln of 17-wk bills on September 2nd; to sell USD 85bln of 8-wk bills and USD 90bln of 4-wk bills on September 3rd; all to settle Sept. 8th

When bill supply is being ramped, that has historically reflected either rebuilding of the Treasury's cash balance or financing pressure ahead of debt limit constraints, and when sizes are being cut the reverse has tended to hold. The transmission channel is the front of the curve: heavier bill supply cheapens the very short end, pressures bill yields relative to OIS, and can drain reserves through a rising Treasury general account, which in past episodes has shown up in repo and money market conditions rather than in longer maturities. The distinction worth drawing is between regular rollover-sized auctions, which are mechanical, and a step up or down in size, which is the discretionary part. Worth watching is whether the 4, 8, and 17 week sizes trend in either direction over coming weeks and how the 17 week, a relative newcomer to the calendar, settles into a steady cadence. As a standard operations notice, this is calendar filler unless the amounts deviate from the prevailing pattern.