Here's What The Treasury Will Announce In Its Borrowing Estimate At 3pm Today

Ahead of Wednesday's Quarterly Refunding Announcement by the Treasury and the latest FOMC announcement, as well as today's Treasury Borrowing Estimate report, a firely but nerdy clash - with potentially huge consequences - has broken out within the rates market between those who expect the Treasury to surprise to the downside with its upcoming Sources and Uses forecast (like us, for example, as discussed in "How Janet Yellen Will Unleash Another Market Meltup Next Monday"), and a splinter group which expects far greater borrowing estimates to be unveiled by Janet Yellen 6 months before the election (and in doing so sending yields soaring, stocks tanking, and generally tanking the Biden admin at the worst possible moment).

We won't go over the specifics of the former, since we already did that in great detail last Friday; we will instead focus on the recent view that today's Borrowing Estimate statement (due at 3pm ET) may come as a shock surprise to the upside according to some, who expect a Q3 borrowing estimate as high as $1.2 trillion.

For that, we give the mic to Nomura's Charlie McElligott who writes that  number of client conversations over the past week or so had highlighted the magnitude of the US government tax receipts collected into / around Tax day, "which rationally on account of rising wages and enormous capital gains –tied inflows, and have powered the TGA to its highest levels in two years at the current $941B, nearly ~ +$190B over the Treasury’s targeted EOQ balance of $750B", as we first noted first two weeks ago.