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Tailing 2-Year Auction Prints At Highest Yield Since 2008

• by Tyler Durden

Having spooked the bond market earlier with her surprisingly hawkish remarks, and sending the 2Y surging while flattening the curve even more, moments ago the Treasury sold $26 billion in 2 Year paper at a yield of 1.462%, a notable jump from last month's 1.345%, and the highest since October 2008. It also tailed by 0.2 bps to the 1.460% When Issued, which however was to be expected following the sharp move just minute earlier.

The internals were average, with the cid-to-cover at 2.88 vs last month's 2.86%, and the six previous auction average of 2.91. Indirect bidders withdrew further, and were awarded 44.2% vs six previous auction average 55.1%, and down from 45.80% in August. This was the lowest Indirect takedown since December. Direct bidder interest jumped, resulting in an award of 19% vs six previous auction average 13.7% and notably higher than the 12.6% in August. Finally, Dealers were left to sop up the mess, and were awarded 36.8% vs six previous auction average 31.2%.

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