U.S. Treasurys yields rose on Tuesday after traders took profits on uncertainty ahead of a highly anticipated European Central Bank meeting this week.
Traders reevaluated expectations that the ECB might embark on new quantitative easing to ward off deflation at Thursday's meeting. Doubts as to the ECB's plans drove German government bond and Treasuries yields higher.
"It could be those expectations were getting a little bit lofty," said Stanley Sun, interest rate strategist at Nomura Securities International in New York, citing the expectations for more ECB stimulus. "I wouldn't be surprised if we get more volatility heading into Thursday."
German Bund yields plunged to record lows last week, pulling Treasurys yields lower with them, following comments from ECB President Mario Draghi at a central bank symposium in Jackson Hole, Wyoming hinting at the potential for more stimulus.