$35 Billion 2 Year Auction Prices At Fresh Record Low Yield Of 0.4%, 3.43 Bid To Cover
Today's 2 Year $35 billion auction closed at a brand new record low yield of 0.40%, compared to 0.44%, and just over 1% a year earlier. the Bid To Cover of 3.43 was a drop from last month's record 3.78, but was still in the top 5 highest BTCs in history. Indirect bidders took 39.98%, leaving the balance to primary dealers and directs, the latter of which jumped by 50% from 10.78% to 15.90%, and only the second highest in 2010. Since the 2 year is now almost a functional equivalent of a money market issue, and since the Fed will soon be forced to buy as much of the short-end as it can get its hands on, this auction was not very indicative of much: auctions in the 7-10 year bucket continue to be the most critical (5 Year auction tomorrow, 7 Year on Thursday).