US Treasury 2-year auction draws highest foreign buying since March 2025

Foreign investors showed up in force at the latest US Treasury 2-year note auction, snapping up the largest share of the offering since March 2025. Indirect bidders, the standard proxy for foreign central banks and international investors, claimed 56.6% of the $69 billion sale held on July 27. That level of overseas participation is notable not because it’s a dramatic spike, but because it’s remarkably consistent. Historical averages for indirect allocations in 2-year auctions hover around 57%, meaning foreign buyers are right on trend. The numbers behind the bid The 56.6% indirect allocation translates to roughly $39 billion in purchases by non-US entities. That figure sits comfortably within the 53% to 57% range that recent months have established as the new normal. In dollar terms, the trajectory has been climbing. Foreign investors purchased approximately $9.9 billion in 2-year notes during a June 2026 auction, up from around $9.2 billion in April. Total foreign holdings of US Treasuries surpassed $9 trillion as of mid-2026. Why foreign buyers keep coming back The 2-year note occupies a sweet spot in the Treasury market. It’s short enough to limit duration risk, the danger that...