An auction of a record $40 billion in two-year Treasury notes drew a yield of 0.925% allotted to 33.41% of bidders. The high yield was below the 'when issued' yield of 0.930% prior to the announcement.
The median discount rate was 0.871% and the low yield was 0.783%. The bid-to-cover ratio was 2.69, with non-competitives taking $421,822,600. Primary dealers took $24,753,395,000, with direct bidders receiving $1,118,000,000 of competitives and indirect bidders taking $13,706,860,000.
On the spot market, benchmark 2-year yields fell to 0.83% from 0.86% in the moments following the auction.
On Thursday, the Treasury will auction a record $30 billion in 5-year notes. In two-weeks, record 10-year and 30-year auctions are expected as the government issues debt to cover the cost of recent stimulus and bailout packages.
By Adam Button and edited by Sarah Sussman
©CEP News Ltd. 2009