US two-year note auction fetches $69 billion at 4.787% high yield

• High yield came in at 4.787%
• When-issued level stood at 4.785% at auction time
• Tail measured 0.2 basis points, versus the 0.1 basis point average
• Bid-to-cover ratio hit 2.63X, compared with a 2.61X average
• Direct bidders took 29.2%, above the 28.3% average
• Indirect bidders accounted for 57.79%, versus the 58.6% average
• Dealers absorbed 13.19%, versus the 13.1% average

Auction grade: C

The sale ran close to the norm across the board. The 4.787% high yield landed 0.2 basis points above the when-issued figure, a tail only slightly wider than the usual 0.1 basis point. Demand edged up on the bid-to-cover measure, at 2.63 times versus 2.61 times, and direct bidders claimed a bit more than their typical share. Indirect bidding slipped just under average, while the dealer take was about steady. With no clear sign of strength or weakness, C is a reasonable grade.