Today's $35 billion 2 Year bond auction priced at 0.745%, on top of the WI. Yet despite the seeming lack of weakness, the internals were not pretty, with the Bid To Cover coming at 3.03, the lowest since the 2.93 at the May 2010 2 Year auction. This alone would indicate a material weakness in the bidside. What is also troubling, is that just like in the 10 Year auction from earlier this month, the Direct Bidders declined notably, coming at just 6.81%, compared to an average of 15% in the last year, and the lowest since November 2009. And while Indirects came in roughly as expected, Primary Dealers took down 61.85% of the auction: the highest amount since July 2009. The dynamic of bond bidding are certain changing as there is a big rotation going on behind the scenes. Alas, there continues to be insufficient information to determine just where the bidding interest is disappearing from. That said, we expect the "UK holdings" in February when they are released some time in May, to be flat or even decline.