Treasury Sells A Record $50BN in 2Y Notes At A Record Low Yield In Blockbuster Auction

Unlike recent long-end auctions which saw poor reception in the 20Y and especially 30Y sales earlier this month, moments ago the Treasury sold a record $50BN in 2 year paper in what can only be described as a blockbuster auction.

The auction size, as previously noted, was $2BN more than July's $48BN, for an all-time high $50BN.

The high yield of 0.155% stopped through the 0.158% When Issued by 0.3bps, and was tied with July for an all time low yield.

The Bid to Cover was also impressive, surging from 2.34 to 2.78, far above the six-auction average of 2.57  and the highest since April's stellar 3.10. In fact, except for that outlier, this would have been the highest BTC since August 2018.

However, the internals were especially impressive, with foreign buyers rushing to buy as Indirects took down 57.6%, well above the recent average of 51.4% and the highest since January 2018; and with Directs taking down 13.7% in line with recent auctions, Dealers were left with just 28.7%, well below the recent average of 35.0%.

Overall, a blockbuster auction just coming just two days before Powell's Jackson Hole webcast, indicates that virtually nobody has any concerns about a hawkish surprise out of the Fed.