There was some concern that in today's ultra thin tape, there may just not be enough demand (or volume) to absorb the $29 billion in 7 Year paper [5] that was to be auctioned off at 11:30am. That wasn't exactly the case, and moments ago the Treasury sold, almost without a glitch, CUSIP G87 due December 31, 2021 at a high yield of 2.125%, which was a 0.5 bps tail to the 2.12% When Issued moments before the auction. Some of the more notable features of today's auction: the Bid to Cover was 2.388, the lowest since 2.36 in November 2013, and while Direct Bidder interest tumbled, and at 5.92% of the final takedown was the lowest since February of 2011, this was more than offset by the Indirects (read Japan's GPIF and comparables), whose take down of 56.5% was the highest since the 64.2% from December 2010, when the yield was 2.83%, or 70 bps wider than today's auction.
In short, any fears that there bond market would find today's auction indigestible have quickly faded away, and judging by the market reaction in the aftermath, namely none, the placement could not have happened more according to plan

