The U.S. Treasury will auction off $48 billion of to year notes at the top of the hour. The six month averages of the major components of the auction show:
- bid to cover, 2.59X
- Directs (a measure of domestic demand), 17.9%
- Indirects (a measure of international demand), 58.6%
- Dealers (they take the rest), 23.4%.
The last auction came in at 2.365%. The current two year yield is 2.561% after reaching a high yield of 2.787% on Friday. So there has been some concession in yields over the last few days and the yield is still 20 basis points above the rate last month. The tell last month came in at 1.0 basis points. The six month average at 0.1 basis points. So there wasn't terribly good demand last month at the 2.365% rate.
Will the 20 extra basis points entice buyers?