The US Treasury will auction 2 year notes. Below is some color from BMO:
Today’s $69 bn 2-year auction comes amid the bond-bullish tone-shift that has defined the last several weeks of price action in the Treasury market. While there isn’t a compelling outright discount with WI 2-year rates at 3.45%, there is a sizable curve-concession with 2s/10s back below the 100-day moving-average of 59.5 bp, and more than 15 bp off the steeps achieved a couple of weeks ago. After reaching as low as 3.38% last Tuesday, the back-up in 2-year rates off the local lows has coincided with a delaying of rate cut expectations into the second half of 2026. Still, the broader cutting bias remains intact with 2-3 cuts expected by year-end, and the market-implied terminal policy rate anchored near 3.0%. Of course, renewed global trade policy uncertainty has, once again, increased the market’s sensitivity to fresh tariff headlines, although that risk didn’t correspond to larger auction tails in 2025
