Normally we would not care so much about a 2-year Treasury Note offering. When you consider that the rate is a massively high 0.25% or so (can you smell the enthusiasm?), it is a wonder anyone bothers loaning the money to the Treasury. Today’s auction was for $35 billion.

Weak economic data and the situation in Cyprus and Europe would have led most investors to believe that the Treasury auction would have been better attended. The median yield was 0.244% and the low yield was 0.199%, but the yield price want off at 0.255% for the 0.25% coupon. Almost all of the offering was taken in the competitive offering ($34.704 billion). The bid to cover of 3.288 was about a half of a point shy of the average and the lowest bid to cover ratio back to July of 2011.

Normally we would say that this doesn’t matter. In fact, it should not matter on its own. The problem is that we have 5-year and 7-year Treasury note auctions on deck the rest of this week and that is ahead of the long weekend for Easter.

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