The bid yield of the 2-year US Treasury note is lower than the pre-issuance trading level, attracting strong demand.

The U.S. Treasury Department issued $69 billion of 2-year Treasury notes, with a bid-to-cover ratio of 3.580%, lower than the pre-auction trading level of 3.594% at 1 p.m. New York time. After the auction, short-term rates rose slightly, and the 2s10s yield spread flattened. Primary dealers were allocated 7.3%, close to a record low, while indirect bidders were allocated 64.4%, and direct bidders were allocated 28.3%. The bid-to-cover ratio was 2.75 times, higher than the previous six auctions' average ratio of 2.61 times.