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US TSYS/SUPPLY: 2Y Auction Preview – WI Yield 15bps Above October Despite Rally

US TSYS/SUPPLY
USBulletMarketsFixed Income BulletsNorth America

Treasury sells $69bn of 2Y notes (91282CLY5) at 1300ET, offering the first recent test of front-end demand before the belly’s turn Tue-Wed. 2Y yields are currently at 4.303% (-7.0bps) owing to the two-step rally on Bessent’s Treasury Secretary nomination from the weekend and oil prices sliding on an Israel-Hezbollah ceasefire prospects. 

  • Despite the rally, the WI yield of 4.280% is 15bp above last month’s high yield.
  • Recent 2Y auction stats: the Oct auction tailed by 0.8bps (largest since May) but the five-auction average sees a 0.4bp trade through primarily owing to a strong 2.1bp trade through in July.
  • The bid-to-cover was 2.50x in Oct vs a five-auction average at an elevated 2.67x.
  • Primary dealer take was 17.93% in Oct vs a five-auction average of 13.03%, whilst on the flip side indirects took 58.23% in Oct vs a five-auction average of 67.39%.
  • The week’s supply is skewed earlier owing to Thanksgiving, with $70bn of 5Y following tomorrow (plus a 2Y FRN) before $44bn of 7Y on Wed. 
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Treasury sells $69bn of 2Y notes (91282CLY5) at 1300ET, offering the first recent test of front-end demand before the belly’s turn Tue-Wed. 2Y yields are currently at 4.303% (-7.0bps) owing to the two-step rally on Bessent’s Treasury Secretary nomination from the weekend and oil prices sliding on an Israel-Hezbollah ceasefire prospects. 

  • Despite the rally, the WI yield of 4.280% is 15bp above last month’s high yield.
  • Recent 2Y auction stats: the Oct auction tailed by 0.8bps (largest since May) but the five-auction average sees a 0.4bp trade through primarily owing to a strong 2.1bp trade through in July.
  • The bid-to-cover was 2.50x in Oct vs a five-auction average at an elevated 2.67x.
  • Primary dealer take was 17.93% in Oct vs a five-auction average of 13.03%, whilst on the flip side indirects took 58.23% in Oct vs a five-auction average of 67.39%.
  • The week’s supply is skewed earlier owing to Thanksgiving, with $70bn of 5Y following tomorrow (plus a 2Y FRN) before $44bn of 7Y on Wed.