Ahead of today’s 2 Year auction there was consternation whether it would be a big flop, or just a modest tail, with so much of the December rate hike jitters focused on the short end. It was neither, and in fact, pricing at 0.948, it printed solidly 0.7 bps through the 0.955 When Issued while the Bid to Cover jumped notably from 3.013 to 3.154.
The internals were also solid, with Directs jumping from 11% to 19% – the highest since June 2014 – of the takedown, Indirects up from 40% to 45.7%, leaving just 35% to the Dealers, the lowest since July.