US sells USD 28bln of 2-year FRNs at high discount margin of 0.115%
- High Discount Margin:0.115% (prev. 0.10%, six-auction average 0.15%)
- B/C: 2.78x (prev. 3.01x, six-auction average 3.29x)
- Dealer: 49% (prev. 41.53%, six-auction average 33.88%)
- Direct: 0% (prev. 0.71%, six-auction average 0.76%)
- Indirect: 50.91% (prev. 57.76%, six-auction average 65.36%)
Context
The results of the recent 2-year FRN auction indicate a significant high discount margin of 0.115%, which, while slightly higher than the previous auction, remains below the six-auction average. The bid-to-cover ratio of 2.78x also reflects a decrease in demand compared to earlier auctions, suggesting diminished investor appetite. This dynamic may influence short-term yield expectations and could have implications for broader risk sentiment in fixed income markets.
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