US Treasury yields trim losses, but still off highs

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U.S. government debt prices edged down on Tuesday after earlier gains on retail sales data came in a bit weaker than expected.

March retail sales grew 0.9 percent, which was the best gain in a year but still weaker than forecast.

Yields on 10-year US Treasurys dropped to 1.8561 percent after the data were released, while 30-year bond yields dropped to 2.4926 percent. Both yields last traded at 1.8952 percent and 2.5402 percent, respectively.

Two-year note yields also sank from 0.54 percent to 0.4960 percent during Tuesday's session, before edging up to 0.5040 percent.

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Producer Price Index (PPI) data for March, met expectations for a modest 0.2 percent month-on-month rise, helped by rising energy prices. This followed four consecutive months of PPI declines.

U.S. business inventories rose slightly more than expected in February as sales remained weak, a trend that could leave businesses with little appetite to accumulate more stock.

The Commerce Department said on Tuesday business inventories increased 0.3 percent after being unchanged in January. Economists polled by Reuters had forecast inventories rising 0.2 percent in February.

Manufacturing indicators and consumer prices and sentiment are also due later in the week.

The 10-year German Bund yields edged closer to negative territory. They last traded down at 0.1370 percent.

—Reuters contributed to this report