NEW YORK: The US Treasury Department on Tuesday sold $26 billion of a two-year debt issue on lighter-than-usual investor demand at a yield of 0.855 percent, the highest since a two-year note auction held in May, Treasury data showed.
The ratio of bids to the amount offered was 2.53, down from 2.65 at the prior auction in September.
This measure of overall auction demand was the lowest since July.
The latest two-year note sale "didn't go as well as expected," Stone & McCarthy Reserve Associates market strategist John Canavan wrote in a note on the auction.
The two-year note sale was part of this week's coupon-bearing supply. The Treasury Department will sell $34 billion in five-year debt on Wednesday and $28 billion in seven-year notes on Thursday.
Fund managers, foreign central banks and other indirect bidders bought 33.72 percent of the two-year issue, which was their smallest share since July.
Small bond dealers and other direct bidders purchased 10.08 percent, their lowest amount since June.
Primary dealers or the top 23 Wall Street dealers that do business directly with Federal Reserve bought 56.2 percent, which was their biggest share since July.
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