If the sellside community was expected to side with the Fed and sell Treasury paper, especially near maturities, then today's 2 Year auction, which just priced at a hot 0.542%, or 1.1 bps through the 0.553% When Issued, indicated more than ample demand for Treasury paper. Further confirming the demand was the surging Bid to Cover, which at 3.714 was the highest of 2014, and the most since December's 3.767.The internals too showed demand across all buyer classes, with Directs taking down 16.2%, Indirects getting 35.83% of the auction and Dealers left with 48%, or just a fraction below the 12 month average.

Altogether, a solid auction, which saw the entire treasury curve jerk 2 bps tighter once the results were announced.