After a sharp drop in US Treasury bonds, traders are waiting for Powell's speech to "provide direction."

The US Treasury bond experienced a three-day rebound, and this trend will face a test on Wednesday. Investors are eagerly awaiting Federal Reserve Chairman Jerome Powell's speech, while also closely watching key data and a bond auction. The yield on the 10-year US Treasury bond stabilized at 4.33% after erasing early losses. Traders are still dealing with the aftermath of the most severe bond sell-off in over twenty years. The more sensitive two-year Treasury yield fell 3 basis points to 3.82%. Earlier, China expressed willingness to start trade talks with the US, which narrowed the early losses in the two-year US Treasury yield. This month, the US bond market has been greatly shaken by President Donald Trump's implementation of a global tariff policy. This move has posed a threat to the US economy and weakened the reputation of US Treasury bonds as the safest asset in the world. Hauke Simson, a strategist at Deutsche Bank, said investors will closely watch Powell's speech on Wednesday evening, looking for clues to the Fed's ability to "deal with market turmoil" and to guide interest rates. In addition, US retail sales data will reflect consumer confidence in March (before the tariff policy was announced). The US Treasury Department will issue $13 billion in 20-year Treasury bonds, hoping to replicate the strong demand seen in last week's bond sale. Since reintroducing the 20-year Treasury bond about five years ago, this term of bonds has struggled to find a stable buyer base. On Tuesday, US officials said they are discussing a possible rule change aimed at reducing bank trading costs and reducing the risk of trading freezes in the $29 trillion US Treasury market. This move has brought support to the market. This is undoubtedly good news for bank trading departments. Last week, bank trading departments were under immense pressure to cope with massive bond sell-offs. The market turbulence was so intense that the spread between 30-year US Treasury bonds and similar products in the swap market once reached a record high of a full percentage point. In addition to the US, government bonds in other countries have also risen. The yield on the 10-year German government bond fell 2 basis points to 2.52%. UK government bonds received additional support as inflation data for March was lower than expected, with the yield on the 10-year government bond falling 3 basis points to 4.62%.