US sells USD 69bln of 2-year notes; Tail 0.1bps

The recent auction of USD 69 billion in 2-year notes saw a high yield of 3.812%, which, while lower than the previous auction, still reflects market expectations.

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US sells USD 69bln of 2-year notes; Tail 0.1bps

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  • High Yield: 3.812% (prev. 3.936%, six-auction avg. 3.577%); WI 3.811%
  • Tail: 0.1bps (prev. 1.8bps, six-auction avg. 0.1bps)
  • Bid-to-Cover: 2.65x (prev. 2.44x, six-auction avg. 2.60x)
  • Dealers: 11.87% (prev. 24.1%, six-auction avg. 12.8%)
  • Directs: 31.65% (prev. 16.5%, six-auction avg. 29.8%)
  • Indirects: 56.48% (prev. 59.4%, six-auction avg. 57.4%)
Context

The low tail of 0.1bps suggests strong demand, with a solid bid-to-cover ratio of 2.65x indicating investors were eager to acquire these notes, even as dealer participation declined significantly. Overall, this auction may imply a sustained interest in short-term debt despite the recent yield fluctuations, potentially stabilizing the yield curve and influencing future rate expectations.

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