U.S. government debt yields fell on Wednesday with traders awaiting monetary policy decisions from major central banks over the next week.
Market focus is largely attuned to central banks, with the European Central Bank (ECB) set to announce its latest monetary policy decision on Thursday ahead of the U.S. Federal Reserve's Federal Open Markets Committee (FOMC) meeting next week.
ECB President Mario Draghi could lower its key deposit rate by 10 basis points to -0.50 basis points, in order to mitigate risk of global trade tensions and sub-par regional inflation, but he may also pave the way for more quantitative easing.
With the U.S. Federal Reserve's Federal Open Markets Committee set to meet on July 29-30, traders are speculating that a 25 basis point cut to interest rates from the Fed could be on the cards.
Markets are reacting to fresh optimism on trade, however, after sources told CNBC that U.S. negotiators will head to China next week for face-to-face talks, as the two economic powerhouses seek a resolution to their ongoing trade war.