Average 2Y Auction Stops Through, Has Highest Yield Since Jan 2025

In the week's first coupon auction, moments ago the Treasury sold $69BN in 2Y notes at a high yield of 4.189%, up from 4.071% and the highest yield since January 2025; the auction also stopped through the When Issued 4.192% by 0.3bps, the biggest through since January.

The bid to cover was perfectly average at 2.643, unchanged from last month's 2.640 and right on top of the recent average of 2.61.

Internals were a bit on the weak side, with Indirects awarded 55.45%, down from 57.60% and the lowest since Dec 25. And with Directs awarded 34.3%or the highest since Oct '25, Dealers were left with 10.24%, down from 12.3% and the lowest since Feb.

Overall, this was a medicore auction which priced on the strong side but whose internals offset that strength, printing a bit weak. Not like any of that mattered for the bond market, however, with yields trading near session lows across the curve.