New Letters auction this Tuesday: everything that changes and you should know if you want to invest

• Treasury Bills and Bonds are back: what they are and how you can invest in them

• Beyond deposits and Treasury Bills: the savings product factory starts up outside the banks

The Public Treasury will auction this Tuesday, February 7, six- and twelve-month bills at a time when private investors are showing great interest in buying this type of debt given its high profitability, which has been growing since the beginning of 2022.

Currently, the marginal return on six- and twelve-month bills

which is why they have aroused the interest of retail investors.

Specifically, in the last issuance of this type, marginal interest stood at 2.599% in six-month bills and 2.998% in twelve-month bills, reaching its highest levels since August 2012. On his side , three-month bills currently register a yield of 2.198% and nine-month bills, 2.839%.

It should be remembered that

for the Direct Accounts service of the Bank of Spain, after the long queues observed these days at the headquarters of the organization for the purchase of State bills given their high profitability .

The purchase of debt can also be carried

in the 'securities purchase and sale service' option, as well as in financial institutions (banks or savings banks) and in securities companies and agencies.

"Small savers are not economists, but they usually know where they should put their money. Given the low profitability offered by banks, inflation that literally eats up the value of their savings, and the guarantee offered by public debt, the demand for Treasury bills", explained Tomás Gómez, professor of the Business Administration and Management Degree at VIU.

OBLIGATIONS WITH A PROFITABILITY GREATER THAN 3.5%

The Treasury will return to the markets on Tuesday, after placing 6,499.35 million euros in the first auction in February, remunerating investors in the four references issued at the highest rates.

In fact, profitability managed to exceed 3.5% in 20-year State bonds.

All this in a context marked by the successive rises in interest rates by both the Fed and the European Central Bank.

In fact, the last decision adopted by the Governing Council of the European Central Bank (ECB) this week was to raise interest rates by

so that the interest rate for its refinancing operations will be at 3 %, while the deposit rate will reach 2.50% and the loan facility rate will reach 3.25%.

For its part, the Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) also decided this week to approve a rise in the country's interest rates of

to place them in a target range of between 4.50% and 4.75%, as reported this Wednesday, according to the Europa Press agency.

In the bond market, the rise in interest rates makes the bond cheaper and attracts capital.

An important part of international capital movements is due to this factor, which has effects on the currency exchange rate," Gómez added.

TREASURE TARGETS FOR 2023

According to the 2023 General State Budget (PGE), gross issuance by the Public Treasury this year will be 256,930 million euros, which represents an increase of 8.2% compared to the estimate for 2022, due to the rise in the interest rates.

For its part, the net indebtedness of the Public Treasury in 2023 will remain at

.

Breaking down by type of instrument, the Treasury Bills are expected to provide net negative financing of 5,000 million, so the State bonds and obligations, together with the rest of the debts in euros and foreign currency, will contribute the remaining 75,000 million.

According to the criteria of The Trust Project

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