22.05.201822:01:00UTC+00U.S. Yields Hold Ground as Markets Focus on Fed Minutes

Treasury yields held their footing on Tuesday as traders focused on Wednesday's publication of the minutes of the Federal Reserve's last policy meeting.

In Europe, rates on government bonds retreated as all focus continues to be on Italy, as the nation's two populist parties waited from President Sergio Mattarella to make a decision on their nominated prime-minister candidate.

The 10-year Treasury note yield was unchanged at 3.065 percent, keeping it near the seven-year intraday high of 3.125 percent last Friday. In the previous week, the benchmark 10-year note recorded its biggest weekly gain since April 20.

The two-year note yield edged up 0.2 basis points to 2.570 percent, while the 30-year bond rate increased 0.3 basis points to 3.208 percent.

With little activity scheduled on the economic calendar and no Federal Reserve officials slated to speak, traders took to the sidelines and waited for new impetus to drive the market. The Fed minutes from the May 1-2 meeting, scheduled to be released on Wednesday, could help steer the direction for the rest of the week, as the report may give hints on the path for rates for the rest of the year.

Markets are hoping to gain an understanding on how much the central bank will allow inflation to overshoot 2 percent, after the U.S. central bank underlined in its May policy statement that the inflation target was symmetric.

An auction for $33 billion of two-year note drew subdued demand from investors.

Meanwhile, in Europe, politics continued to be in focus after the leaders of the 5 Star Movement and The League on Monday presented their nominee candidate to President Sergio Mattarella, political novice and academic Giuseppe Conte. Conte's nomination is said to be a concern for Mattarella and he is yet to give Conte the mandate.