U.S. Treasurys prices higher on Tuesday on uncertainty that the Federal Reserve will hike rates in September, while reduced concerns over Greece stymied demand for U.S. government debt.
A smaller-than-usual amount U.S. economic data led traders to focus more attention on the Fed, which will hold a meeting on monetary policy next week.
While analysts say the Fed is inching toward a rate hike since Fed Chair Janet Yellen repeated the view last week that the central bank would likely raise rates this year, uncertainty about next week's statement and the potential for a September rate increase kept Treasurys prices muted.
"We think the odds are that the Fed will start tightening in September, but it's a close call," said Stan Shipley, bond strategist at Evercore ISI in New York. He said U.S. economic data on the housing market would be closely watched later this week.
A rate is expected to hurt bond prices, which move inversely to yields. Short-dated prices are considered to be especially vulnerable.
Analysts also said reduced concerns over a Greek exit from the euro zone continue to dampen demand for Treasurys. Greece should wrap up bailout talks with international lenders by August 20, once its parliament approves the second package of measures demanded by creditors, a government spokeswoman said.
"We seem to be at this moment out of the woods with respect to Greece," said David Coard, head of sales and trading at Williams Capital in New York.
Corporate supply could also be weighing on Treasurys prices, analysts said. Analysts have said that corporate issuance has been robust since companies' costs to bondholders would increase if they were to issue debt after the Fed raises rates.
U.S. three-year note yields were last down to 1.06 percent, from a yield of 1.09 percent late Monday. Three- and two-year yields earlier hit 19-day highs of 1.105 percent and 0.714 percent, respectively.