Auction History: US to sell USD 28bln of 2-year FRNs at 16:30BST/11:30EDT

• High Discount Margin: (prev. 0.05%, six-auction average 0.09%)
• B/C: (prev. 3.37x, six-auction average 3.19x)
• Dealer: (prev. 36.77%, six-auction average 36.98%)
• Direct: (prev. 0.00%, six-auction average 0.24%)
• Indirect: (prev. 63.22%, six-auction average 62.78%)

Two-year FRN auctions are a different animal from the coupon calendar: because the note resets off the 13-week bill rate, the discount margin rather than the yield is the pricing variable, and demand is driven largely by money market funds and other floaters buyers managing duration near zero rather than by rate views. That means the usual auction-tailing framework applies only loosely; concession and stop-through are read off the high discount margin against the when-issued level, and indirect participation tends to run structurally high given the buyer base, so a soft indirect print is more informative than the headline cover. The size has been creeping up as Treasury leans on bills and floaters to fund the deficit while keeping WAM stable, and supply of this kind has historically been absorbed smoothly except when front-end funding stress or bill supply indigestion is in play, in which case the margin backs up across the floater complex. The tells to watch are the stop-through versus the margin prevailing in secondary FRNs, any shift in dealer takedown as a residual-absorption signal, and whether the result moves the bill curve at the 13-week point, which is the reference leg. Spillover into coupons is typically minimal given the distinct investor base.