The 10-year US note's yield fell to 2.042 percent from 2.058 percent in late US trade on Monday. The yield rose as high as 2.094 percent on Friday, its highest since early December. Demand for safe-haven US debt was further boosted after a report rekindled fears that Portugal, seen as the second most risky country in the euro zone, could be the next potential default candidate after Greece. Further dousing optimism, Germany denied a report that it was ready to boost the combined firepower of the euro zone's rescue funds to 750 billion euros ($979 billion). During its two-day policy meeting starting on Tuesday the bank is expected to push out expectations on when it will next raise interest rates until at least 2014, and the meeting will also be closely watched for any hints of new QE, which analysts expect would focus on mortgage-backed bonds. The Treasury Department will sell four-week bills at 1630 GMT and two-year notes at 1800 GMT. The Treasury will sell a total of $99 billion in new two-, five- and seven-year notes this week.