Auction History: US To sell USD 30bln of 2-year FRNS at 16:30BST/11:30EDT

The upcoming auction of USD 30 billion in 2-year FRNs is marked by a high discount margin, suggesting strong pricing dynamics relative to previous auctions, which may resonate positively among investors.

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Auction History: US To sell USD 30bln of 2-year FRNS at 16:30BST/11:30EDT

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  • High Discount Margin: (prev. 0.12%, six-auction average 0.14%)
  • B/C: (prev. 2.78x, six-auction average 3.23x)
  • Dealer: (prev. 49.09%, six-auction average 37.25%)
  • Direct: (prev. 0.00%, six-auction average 0.61%)
  • Indirect: (prev. 50.91%, six-auction average 62.14%) 
Context

However, the bid-to-cover ratio (B/C) has dipped compared to recent averages, indicating potentially weaker demand, particularly from indirect bidders. This could signal varying appetite for risk and may impact interest rates and the broader fixed income market as traders gauge the auction's reception and implications for future monetary policy.

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