US Treasury Sells $139BN In Two Polar Opposite Auctions: A Stellar 2Y And A Dismal 5Y

Treasury sold $139BN: 2Y auction stellar (4.315%, highest demand since Jan, third stop-through in a row) while 5Y was dismal (14th consecutive tailing, weakest foreign demand in 18 months, bid-to-cover lowest in 5 years). The curve divergence flags inflation or Fed concerns at 3-5Y horizon, pressuring enterprise IT budget decisions through year-end.