The European Central Bank (ECB) is expected to signal easier monetary policy when it meets on Thursday.

The Federal Reserve is also seen as certain to cut its benchmark rate at its July 30-31 meeting.

"The ECB as well as the Fed are both about to move into a more accommodative monetary policy stance in the very near term," said Ian Lyngen, head of US rates strategy at BMO Capital Markets in New York.

The Fed has signaled that a rate cut is likely as the prolonged US-China trade war dents business confidence, global manufacturing slows down and inflation remains below the Fed's target of 2pc a year.

Expectations that the US central bank could make a 50 basis point cut rose last week after New York Fed President John Williams made the case for fast action to stave off economic weakness, but fell back after the New York Fed said the comments were not about upcoming policy action.

The odds of a deeper cut also fell on Friday after the Wall Street Journal wrote that the Fed is likely to cut rates by 25 basis points and that policymakers are not prepared for a 50 basis point rate decrease.

St. Louis Federal Reserve President James Bullard said on Friday he would like a 25 basis point cut as it would give the Fed options for later this year.

The Treasury Department this week will sell $113 billion in short and intermediate-dated notes, including $40 billion in two-year notes on Tuesday, $41 billion in five-year notes on Wednesday and $32 billion in seven-year notes on Thursday.