Bonds

Treasury prices hold gains into market close

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A trader signals orders on the financial floor at the Chicago Board of Trade in Chicago.
Tim Boyle | Bloomberg | Getty Images

The Treasury Department auctioned $26 billion in 2-year notes at a high yield of 0.86 percent on Tuesday.

The bid-to-cover ratio, an indicator of demand, was 2.90, versus a recent average of 3.22.

Indirect bidders, which include major central banks, were awarded 57.9 percent, well above the 45 percent average.

Direct bidders, which include domestic money managers, bought 12.3 percent, versus a recent average of 16 percent.

U.S. sovereign bond prices held higher after the auction, weighing on yields even as U.S. stocks and oil prices rose in early trading.

The U.S. 10-year Treasury note yields, which moves inversely to the bond's price, fell to trade at 2.0046 percent, after closing at 2.022 percent on Monday. Meanwhile, the longer-dated 30-year yield fell to 2.7942 percent after finishing at 2.802 percent in the previous session.

Treasurys

As concerns surrounding global growth, uncertainty in China and fresh lows in oil prices gripped markets, investors have rushed into safe-haven assets such as U.S. Treasurys.

The market will also be on edge as the Federal Reserve also begins its two-day meeting Tuesday, and while it is not expected to take any action on rates, traders are hopeful it will make some reassuring comments about market volatility and offer some guidance on rate hikes.

The central bank has forecast four rate increases for this year, while the market is expecting one. The Fed is scheduled to release its post-meeting statement Wednesday at 2 p.m. ET.

Oil futures rebounded back over $31 a barrel on Tuesday, lifted by hopes that OPEC and non-OPEC producers may be edging closer to a deal to tackle one of the biggest supply gluts in decades.

— Reuters and CNBC's Tom DiChristopher contributed to this report.