U.S. Treasury bonds extend decline as market awaits economic data and Federal Reserve minutes

　　Ahead of the release of a series of key economic data and the Federal Reserve meeting minutes that could provide clues on U.S. interest rates, U.S. Treasuries are heading for a second consecutive day of decline.

　　The yield on the 10-year Treasury note rose by 1 basis point to 4.07%, set for its first two-day increase since the beginning of the month. Yields have slightly rebounded after last weekend’s sharp drop, which was triggered by moderate inflation data that fueled expectations of Federal Reserve rate cuts.

　　On Wednesday, investors will be watching for data on durable goods orders, new housing starts, and industrial production, as well as the minutes from the January Federal Open Market Committee (FOMC) monetary policy meeting. The U.S. Treasury will also issue $16 billion in 20-year bonds.

　　“The minutes from the January FOMC meeting may be more noteworthy because the Federal Reserve’s stance appeared somewhat hawkish at that time,” said Padhraic Garvey, Head of Research for the Americas at ING Group. “The minutes may reveal to what extent this hawkish tilt was intended to curb the dollar’s weakness at that time.”

　　Currency markets expect the Federal Reserve to cut rates by 57 basis points this year, equivalent to two 25-basis-point cuts, with about a 30% chance of a third cut.

Editor: Wang Xuning