Two Year Note Auction Result

March 26th, 2008 12:11 pm | by John Jansen |

So much for the theory that bidding would be less than robust for the $28 billion of 2 year notes at the just completed auction.

The auction average was 1.761 percent which is about 2.5 basis points through where they were trading in the broker market prior to the auction.

Indirect bidders which the conventional wisdom holds is a proxy for central bank interest was 25.3 percent ,little changed from last month.

The issue is bid at 1.74 percent currently as those who missed the auction are forced to buy in the secondary market.

The 2year /10 year spread has also widened as the shorts scramble to cover and it rests currently at 177 basis points.

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  1. 2 Responses to “Two Year Note Auction Result”

  2. By fredw on Mar 26, 2008 | Reply

    The five year year note auction Thursday should provide greater insight as to whether indirect bidders really are stepping up to the plate , right ? Let’s see if they will go further out the yield curve at this point in time.

  3. By John Jansen on Mar 26, 2008 | Reply

    This is sort of a preview of what i am just beginning to write for my closing commentary but I think the 5 year will be OK also as there has been some chunk selling of the long end of the curve today by end users as they seek safety in the front end. So alot of 10 year and 30 year paper was sold and the buyers bought the 2year or the 5 year.So dealers were caught short and needed to scramble to cover.

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