Foreign Demand Plummets in $69 Billion Treasury Note Auction

The United States Department of the Treasury conducted a $69 billion auction of two-year Treasury notes on October 26, 2026, which revealed a sharp decline in international interest. Foreign buyers, identified as Indirect bidders, purchased only 45.7% of the issuance. This represents the lowest level of foreign demand since November 2021 and a significant decrease from the 57.8% recorded in September.

Domestic Direct demand rose to a record 41.3%, offsetting the collapse in foreign participation. Despite this surge, the auction showed signs of weakness, with the bid-to-cover ratio falling to 2.589, the lowest since March. The auction also tailed the When Issued yield by 0.3 basis points, marking the largest tail since March.

Market analysts attribute these results to high volatility as investors awaited a scheduled decision from the Federal Open Market Committee.