The Treasury Department began the week by announcing the outcomes of its long-term securities auctions. It was revealed that this month's auction of $66 billion in two-year notes garnered lower than average demand.
The two-year note auction yielded a high return of 4.595 percent and a bid-to-cover ratio of 2.62. Last month, the Treasury Department had sold $63 billion worth of two-year notes, which resulted in a high yield of 4.691 percent and bid-to-cover ratio of 2.49.
Used as a measure of demand, the bid-to-cover ratio reflects the quantity of bids received for each dollar’s worth of securities on sale. An examination of the previous ten two-year note auctions revealed that the average bid-to-cover ratio stood at 2.71.
Looking forward, the Treasury Department is set to disclose the outcomes of this month's auctions of $67 billion in five-year notes and $43 billion in seven-year notes on the coming Tuesday and Wednesday, respectively.
