U.S. Treasury to auction off $54 billion of 2-year notes at the top of the hour

The U.S. Treasury will auction off $54 billion of to year notes at the top of the hour. The current yield is trading around 0.97%.

The six month averages of the major components shows:

• Bid the cover, 2.40X
• Directs (a measure of domestic demand), 17.2%
• Indirects (a measure of international demand), 53.9%
• Dealers (they take the rest), 26.4%.

The last auction in the issue last month came in a a high yield of 0.769%. Rates have moved higher over the last month in reaction to expectations for a tighter Fed policy.

The tail last month was 0.6 basis points. The average tail over the last six auctions has been 0.2 basis points.

The Fed will also auction off five year notes tomorrow and seven year notes on Thursday (they will not auction off any issues on the FOMC day).