Today's very ironic $35 billion 2 Year Bond with a Cusip identifier QE3 (no joke, check it) just priced at a 0.673% high yield, slightly higher than last month's 0.669%. Yet the notable metric that caught everyone's attention was the Bid To Cover which came at a 3.06 compared to 3.41 previously and 3.2 average. Primary Dealers took down 49%, with 38% left for Indirects and 13% left for the Direct Bidders, a breakdown in line with expectation. What is important is that dealers expressed the lowest amount of bidding interest for this auction in 2 years: the $72.9 billion Primary Dealer bid was the lowest for a 2 Year auction since December 2008. This auction merely brings the total debt that much closer to the now largely irrelevant debt ceiling. And since there are another $64 billion in auctions over the next two days, it is about to get very tight in there. As a reminder, tomorrow's 5 year auction will close early at 11:30 am due to the Fed press conference.
Due to technical issues we will provide the chart associated with this auction later.