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Two-Year Note Auction Attracts Below Average Demand

Kicking off this week's announcements of the results of its long-term securities auctions, the Treasury Department revealed Tuesday that its auction of $40 billion worth of two-year notes attracted below average demand.

The two-year note auction drew a high yield of 0.398 percent and a bid-to-cover ratio of 2.36.

Last month, the Treasury also sold $40 billion worth of two-year notes, drawing a high yield of 1.188 percent and a bid-to-cover ratio of 2.45.

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 2.58.

The Treasury is due to announce the results of its auction of $41 billion worth of five-year notes on Wednesday, while the results of its auction of $32 billion worth of seven-year notes will be revealed on Thursday.

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