Gross treasury-bill issuance in Canada is rising to $31 billion this week, or $1 billion higher, said National Bank of Canada.
Of that, the Bank of Canada will buy $310 million, or 1% of the tender, noted the bank.
With $25.2-billion maturing on Wednesday, there'll be a "sizeable" $5.8 billion in net supply for investors to absorb. That's the largest single auction net issuance lift since a year ago, stated National Bank.
By the end of the week, this will push the bill stock up to $294 billion. That's above the $268 billion target outlined in last month's Debt Management Strategy, pointed out the bank.
The federal government also ramped up its bill stock last spring and into the summer, ultimately peaking at $310 billion and moving much lower in the fall, added National Bank.
Investors are likely to see that play out again as the government needs to fund bond maturities in June, August and September. So, the bank expects an eventual reduction in auction sizes, but not necessarily in the near term.