The 2 yr note auction was light as the yield was above the when issued and the bid to cover of 3.16 was below the 12 month average of 3.33 and the 2nd lowest dating back to last August. Impacting the bidding positively on one hand was likely the Japanese disaster and subsequent negative impact it may have on global economy activity and the Middle East unrest too but on the other hand where buyers may have stepped back to result in a mediocre auction, maybe, just maybe, the comments from Plosser on Friday and Bullard on Saturday had an impact that while the Fed is NOT raising rates any time soon, they really mean it that QE2 may not be followed by QE3.
