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SMRA's John Canavan said today's 2Y......>

US TSYS/2Y
US TSYS/2Y: SMRA's John Canavan said today's 2Y auction "results were basically
average. The 1.462% stopout rate was just below the 1.463% 1pm bid side, and the
2.86 bid/cover was about average. This will be a new issue with a 1-3/8% coupon.
The Indirect takedown was weak, but a strong Direct bidder takedown made up for
it" so the 63.2% "combined buyside takedown" was "above the 61.0% average of the
prior year, although below the larger 68.8% avg of the prior 6 months. There
were large declines in demand from both investment funds and foreign bidders,
which was also true for the 3-yr note auction earlier this month. Today's
figures suggest though that the demand from both likely improved with the 2-year
auction today."
- He added direct bid was "unusually strong this month. The $8.172 billion size
of the Direct bid was the largest since August of last year, and compares to an
average of $5.450 billion over the prior year. The bid was also reasonably
aggressive, leading to a 19.0% takedown, which is the largest since February.%."

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