Last month, with the entire world absolutely certain that the Fed would hike rates, it seemed it was easier to pull teeth than to find buyers for the December 2 Year acution. Not so much this time: moments ago the US Treasury sold $26 billion in 2 Year paper in an auction delayed from yesterday's snow day, in a whopper of an auction which saw 3.739 dollars in demand for every dollar, a Bid to Cover that was the highest since December 2013 and far above the 3.38x TTM average.
And it wasn't the rising yield that drove interest: quite the contrary - the High Yield of 0.54% not only plunged from last month's 0.703%, but also priced through the 0.544% When Issued.
Finally, while Directs took down only 8.75% as a result most likely of Pimco moving away from the short-end, and the lowest since June 2013, it was the Indirects that soared to 48.7%, the highest since February of 2010 when it was 54%.
Overall, if anyone is seeing a rate hike announcement on the imminent horizon, it sure isn't the exuberant buyers of today's 2 Year auction.
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