Terrible 2Y Auction: Largest Tail In Three Years, Dealers' Share Highest Since 2022
Disappointing 2-Year Bond Auction Amid Surging Oil Prices
As both international and local investors rapidly sell off gold and other assets to raise funds for oil—now trading at a fresh high of $170 in Asian markets—the question arose: how soon would this cash crunch impact US government debt? The answer arrived shortly after 1pm with the outcome of today’s $69 billion 2-year Treasury bond auction.
The results were notably poor. The bonds were issued at a yield of 3.936%, a significant jump from last month’s 3.455% and the highest level seen since May 2025. Additionally, the auction yield exceeded the When Issued rate by 1.8 basis points, marking the largest such gap since March 2023. The bid-to-cover ratio also fell sharply to just 2.44, reflecting weak demand.
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