The auction drew a 4.315% high yield with a slim -0.5 bps tail and strong demand metrics.
The US Treasury sold $16 billion of two-year notes at a high yield of 4.315%, slightly below the when-issued level of 4.320%. The auction produced a -0.5 basis points tail, narrower than the average 0.1 bps, signaling solid demand despite the negative spread.
The bid-to-cover ratio reached 2.66X, above the recent average of 2.63X, while direct bidders took 34.05% of the offering, up from the 29.2% average. Indirect bidders accounted for 56.59%, slightly below the 58.2% average, and dealers absorbed 9.36%, less than the typical 12.6%.
Market participants described the auction as solid, with dealers left holding a smaller-than-average share of the notes.