FX.co ★ Two-Year, Five-Year Note Auctions Attract Below Average Demand

The Treasury Department has released the outcomes of its recent auctions for $69 billion in two-year notes and $70 billion in five-year notes, indicating a notably lower demand than usual.

The auction of the two-year notes yielded a high rate of 4.917% with a bid-to-cover ratio of 2.41. Comparatively, last month's sale of the same amount drew a high yield of 4.898% and a bid-to-cover ratio of 2.66. It is worth noting that the bid-to-cover ratio, which measures the demand by comparing the number of bids to the dollar amount of securities being sold, has averaged 2.67 over the last ten auctions for two-year notes.

In parallel, the five-year note auction resulted in a high yield of 4.553% and a bid-to-cover ratio of 2.30. Last month, the Treasury sold the same amount with yields reaching 4.659% and a bid-to-cover ratio of 2.39. The average bid-to-cover ratio for the preceding ten five-year note auctions stands at 2.45.

Additionally, the Treasury will disclose the results of its auction of $44 billion worth of seven-year notes on Wednesday.