The yield on the 30-year bond recouped some of the lows seen on Monday to trade a 2.833 percent, up from 2.802 percent. When a bond's yield falls, its price rises.
Ahead of Wednesday's release of the minutes of the end-July Federal Open Market Committee meeting, U.S. housing starts for July came in at 1.206 million, higher than the expected 1.17 million.
The timing of the U.S. central bank's first rate hike in nine years has been a constant source of debate in the markets, as traders await the final pieces of economic data the Fed will take to its September rate meeting. Minutes of the Fed's July meeting could give investors some clarity.
On Tuesday, the Treasury will auction $40 billion in 4-week bills and $22 billion in 52-week bills Tuesday. The Treasury will auction $16 billion of five-year Treasury Inflation Protected Securities Thursday.
Meanwhile in China, the Shanghai Composite index closed down 6.1 percent, at its lowest level since August 7 on yuan concerns. The currency last changed hands at 6.4011 per U.S. dollar.
This occurred even though the People's Bank of China raised the midpoint rate of the yuan to 6.3966 per dollar—slightly firmer than the previous fix of 6.3969.
Oil prices were also in focus Tuesday as prices remained under pressure.Brent crude traded down 0.64 percent around $48.43 per barrel, while U.S. crude traded down a similar amount around $41.59. Both crude oil benchmarks are now almost a third below their last peak in May, with data showing speculators have taken huge bets on further falls, according to Reuters.