FX.co ★ US 10-Year Yield Edges Down

The yield on the 10-year US Treasury note declined to 4.36% on Tuesday, as markets evaluated the outlook for US borrowing amid an uncertain macroeconomic environment. Primary dealers of Treasuries anticipate that the US will maintain current auction sizes for the upcoming third quarter, aligning with previous forecasts, given the heightened scrutiny on US borrowing following recent debt-limit challenges and the passage of an expansionary fiscal bill by President Trump. Simultaneously, the US and the European Union have agreed to broad terms regarding future trade; however, investors remain concerned about potential uncertainties as the parties begin to negotiate the intricate details of the agreement. Expanded tariffs, including increased rates on other major US trading partners, are scheduled to take effect on Friday. Meanwhile, the Federal Reserve is expected to keep interest rates unchanged on Wednesday, as the inflationary pressures from tariffs are balanced by signs of a strong economy; nonetheless, rate futures indicate speculation about two potential rate cuts within the year.