Off to a weird start, as there were two short-term note auctions on Monday, a two-year and a five-year auction. Another massive addition to the US debt pile, $69 billion in the two-year auction and $70 billion in the five-year auction. The two-year note priced at a high yield of 3.5%, significantly lower than in September. Demand was just acceptable, with less interest by foreign buyers. Then the five-year notes sold at a high yield of 3.625%, also lower than the recent similar auctions and slightly lower than expected. Demand was good, with strong foreign buyer participation.
The last auction of the week occurred today, $44 billion in seven-year notes. So close to $200 in new debt issuance this week alone, although some might be rollover of existing debt. The high interest rate, 3.79%, was down from September and a little higher than expected. Demand was weaker than the last few auctions and foreign demand in particular was weak. Hard to know how to interpret the totality of these auctions, but there are warning signs about the buyer willingness to keep absorbing all this debt.
