U.S. Treasuries set for biggest monthly loss since 2013

NEW YORK, Feb 27 (Reuters) - The U.S. Treasuries market was poised for its worst month in more than 1-1/2 years in February as investors scaled back their safe-haven bond holdings on improving U.S. economic data and bets the Federal Reserve may raise interest rates this year.

U.S. government securities have posted a combined loss of 1.6 percent through Thursday. This is an about-face from a 2.6 percent gain in January which was its biggest monthly increase since August 2011, according to an index compiled by Barclays (LSE: BARC.L - news) .

This would be the biggest monthly decline since May 2013 when Treasuries lost 1.7 percent after then Fed Chairman Ben Bernanke hinted at a Congressional appearance the U.S. central bank would consider ending its third round of quantitative easing.

February's loss in the Treasuries sector was led by a sell-off in longer-dated issues. Barclays' U.S. 20-year plus Treasury index has declined nearly 6 pct through Thursday, which would be its largest monthly drop since May 2013.

The broader U.S. bond market also fared poorly in February after a stellar January.

Barclays' widely followed U.S. Aggregate index has decreased about 1 percent so far in February, which is on track for its biggest monthly loss since June 2013.

In late Friday trading, benchmark 10-year Treasury notes were up 4/32 in price with a yield of 2.000 percent, down 1 basis points from Thursday. The 10-year yield has risen 32 basis points in February following a 49 basis point drop in January, according to Reuters data. (Reporting by Richard Leong; Editing by James Dalgleish)