U.S. Treasury auctions off $69 billion of 2-year notes at a high yield of 4.434%

US treasury auctions off $69 billion at a high yield of 4.434%

• High yield 4.434%
• Tail -2.3 basis points vs six month average of 0.2 basis points
• Bid to cover 2.81X vs six month average of 2.58X. Best since August 2023
• Direct (a measure o domestic demand) 14.42% versus six month average of 21.0%. Weakest since Jan of 2022
• Indirects (international demand) 76.57% versus six month average of 64.3%. Highest on record.
• Dealers 9.01% versus six month average of 14.7%

AUCTION GRADE: A

The only thing bad about the auction was that the international demand outbid the domestic buyers. There was a negative tail. The bid to cover was well above the six month average.