Treasury's $40 B 2-year auction was not bad and certainly better than feared
Treasury's $40 B 2-year auction was not bad and certainly better than feared. The note stopped through at 2.600% versus 2.606% at the bid deadline. And it compares to December's 2.619%. There were nearly $102.6 B in bids for a 2.56 cover, stronger than the poor 2.31 from December (weakened by the thin holiday trade), but it is below the 2.79 average. Indirect bidders accepted 54%, better than both last month's 45.0% and the 45.3% average. Direct bidders took a huge 19.1%, more than double December's 7.8%. It's just off the 19.5% fro November, which was the highest since February 2017. Primary dealers were awarded 27.5% from 47.2%. Meanwhile, the $39 B 6-month was awarded at 2.450%, also through the 2.465% at the deadline and it compares to last week's 2.450%. The bid cover was 3.09, little different from 3.10 previously and the 3.14 average. Indirect bidders took 44.4%, a little less than the prior 48.9% and the 48.5% average. Remember there are $41 B in 5-year notes and $42 B 3-month bills for sale at 13:00 ET.