A three-day rebound in US Treasuries will be tested on Wednesday as investors await commentary from Federal Reserve Chair Jerome Powell as well as key data and a bond auction.
The US 10-year yield was steady at 4.33% having erased an earlier decline, as traders grapple with the aftermath of the worst rout in more than two decades. Shorter-dated two-year rates, which are more sensitive to monetary policy, were three basis points lower at 3.82%, paring an earlier drop after China said it was open to US trade talks.
US bonds have been whipsawed this month as US President Donald Trump’s move to impose global tariffs raised threats to the economy, undermining Treasuries’ reputation as the world’s safest asset. Investors will be looking to Powell’s speech later Wednesday for clues on the Fed’s ability “to deal with market turmoil,” as well as guidance on interest rates, according to Hauke Siemssen, a strategist at Commerzbank AG.
In addition, US retail sales numbers will offer a gauge of consumer sentiment in March — before the tariffs were announced — while the Treasury will seek a repeat of the healthy demand seen for last week’s bond sales with a $13 billion offering of 20-year debt. That tenor has struggled to find a consistent buyer base since it was relaunched about five years ago.
