US sells USD 69bln of 2-year notes; stop-through 0.4bps

• High Yield: 4.204% (prev. 4.315%, six-auction avg. 3.963%); WI: 4.208%
• Tail: -0.4bps (prev. -0.5bps, six-auction avg. 0.2bps)
• Bid-to-Cover: 2.60x (prev. 2.66x, six-auction avg. 2.61x)
• Dealers: 10.9% (prev. 9.4%, six-auction avg. 13.0%)
• Directs: 23.1% (prev. 34.1%, six-auction avg. 30.1%)
• Indirects: 66.0% (prev. 56.6%, six-auction avg. 56.9%)

A stop-through at the front of the curve is a familiar pattern: two-year auctions clear through the when-issued level when sponsorship is end-user rather than intermediary, and the takedown here fits that mould, with indirects taking a notably larger share than their recent norm and directs stepping back, leaving dealers with a below-average residual. The stop-through versus the average tail is the cleaner read than the modestly softer bid-to-cover, since cover ratios at the two-year have been range-bound while the allocation mix has been the swing variable in determining pricing quality. Historically, strong foreign and real-money participation at this tenor has tended to coincide with front-end richness holding into the settlement period, whereas dealer-heavy auctions have more often cheapened in the days after. The distinction worth drawing is between demand that reflects conviction on the policy path and demand that is concession-driven, and a through-the-WI stop points to the former. The follow-ons are the remaining coupon supply on the calendar this week, where belly auctions have historically been the harder test, and whether the front-end strength is corroborated by the tenor most sensitive to the rate path.