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Two-Year Note Auction Attracts Below Average Demand

The Treasury Department kicked off this week's series of long-term securities auctions with the sale of $26 billion worth of two-year notes on Monday, attracting below average demand.

The two-year note auction drew a high yield of 1.765 percent and a bid-to-cover ratio of 2.73.

Last month, the Treasury also sold $26 billion worth of two-year notes, drawing a high yield of 1.596 percent and a bid-to-cover ratio of 2.74.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous two-year note auctions had an average bid-to-cover ratio of 2.86.

Looking ahead, the Treasury is due to sell $34 billion worth of five-year notes later in the day and $28 billion worth of seven-year notes on Tuesday.

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