The U.S. Treasury Department recently released the outcomes of its latest auctions, which involved $69 billion in two-year notes and $70 billion in five-year notes.
The auction for the two-year notes experienced a lower-than-average demand, yielding a high rate of 4.130% with a bid-to-cover ratio of 2.50. This metric, the bid-to-cover ratio, reflects the level of demand, representing how many bids are received for each dollar of notes available. In comparison, the analogous auction from the previous month also encompassed $69 billion in two-year notes, which featured a high yield of 3.520% and a slightly higher bid-to-cover ratio of 2.59. Historically, the average bid-to-cover ratio for the last ten two-year note auctions was 2.63.
In contrast, the auction for the five-year notes showed approximately average interest, with a high yield of 4.138% and a bid-to-cover ratio of 2.39. Last month’s auction of the same amount resulted in a high yield of 3.519% and a nearly identical bid-to-cover ratio of 2.38. It's worth noting that the average bid-to-cover ratio for the past ten five-year note auctions also stands at 2.39.
Looking ahead, the Treasury Department is set to disclose the results for this month's auction of $44 billion in seven-year notes.
