The US Treasury Department auctioned $69 billion in 2-year notes, resulting in a high yield of 4.315%. This came in slightly below the pre-auction trading level of 4.320% at the 11:30 AM ET bidding deadline, indicating demand was a touch stronger than anticipated.

Despite this, the awarded yield represents the highest for a 2-year note auction since December 2024. Following the results, the yield on the benchmark security decreased by roughly 1 basis point on the day, maintaining gains for short-term Treasuries. The spread between 2-year and 10-year yields held steady at approximately 33 basis points, flattening by about 1 basis point intraday.

Primary dealers took down 9.4% of the auction, one of the lowest allocations on record. Indirect bidders, a category that includes foreign central banks, saw their share increase to 56.6%, while direct bidders’ allocation edged slightly lower to 34.1%. The bid-to-cover ratio, a measure of overall demand, came in at 2.66 times, compared to an average of 2.63 times over the previous six auctions.