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Investing.com -- The U.S. government sold $69 billion of 2-year notes on Tuesday at a lower-than-expected yield even as demand slipped amid expectations for the Federal Reserve to cut rates as soon as next month.

The notes were awarded at 3.874%, below the pre-sale, or when-issue, rate of 3.880%, the 4.434% high seen in the prior auction. 

The bid to cover ratio, a measure of demand for the auction fell to 2.68 from 2.81 seen in the prior auction. 

Dealers made up 51.40% of the bids, with direct bidders at 12.65% and indirect bidders at 35.96%. That compared with a high of 75% indirect bidders at the most recent auction as investors anticipate aggressive Fed rate cuts ahead.  

The yield on 2-year United States 2-Year slipped 2 basis points to 3.91%. 

The strong auction comes ahead of the 5-, and 7-year Treasury auctions this week, with the latter two auctions expected to be closely watched as demand for durations has flattened recently. 

 

This content was originally published on http://Investing.com


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