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U.S. Treasury to optional $42 billion of two-year notes at the top of the hour | Forexlive

The U.S. Treasury will auction off a $42 billion of two-year notes at the top of the hour. Yields have moved higher today after the stronger flash PMI data continued to increase the chances of a tighter Fed going forward. The current two-year note is trading at 4.699% up 7.6 basis points on the day.

The auction today is the first of a three note options this week. Tomorrow the treasurer will auction off a five year notes and on Thursday it will auction off seven year notes.

The six-month averages of the major components shows:

  • bid to cover 2.65X
  • Tail 0.0 bps
  • Directs (a measure of domestic demand) 21.2%
  • Indirects (a measure of international demand) 57.9%
  • Dealers 20.9%

The last auction of two-year notes had a high yield of 4.139%. The tail was -1.3 bps.