Treasurys
U.S. sovereign bonds were trading higher Tuesday as investors digested a speech by Federal Reserve Chair Janet Yellen.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, was down at 1.8071 percent, while the yield on the 30-year Treasury bond was also lower at 2.6082 percent. Both yields hit their lowest levels in three weeks, when they hit 1.804 percent and 2.598 percent, respectively.
Two-year note yields, which are the most susceptible to rate hikes, also hit a three-week low.
Yellen, speaking to Economic Club of New York, noted in prepared remarks that recent readings on the strength of the U.S. economy since the beginning of the year have been mixed.
In fact, Yellen said that only gradual increases in the federal funds rate are likely to be warranted in coming years, and global developments have increased the risks associated with the Fed's economic outlook.
"The headlines from Yellen's speech are more dovish than the recent Fed-speak and so we're not surprised to see the Treasury market rallying on the event. Yellen is emphasizing that 'caution' in tightening is 'especially warranted' and the market is acting as an "automatic stabilizer" for the US economy," Ian Lyngen, rates strategist at CRT Capital, said in a note to clients.
In another speech, Dallas Fed President Rob Kaplan said the Fed remains confident the U.S. economy should be resilient in 2016.
On the data front, the S&P Case-Shiller 20-City Composite Index rose 5.7 percent in January from the previous year.
The March consumer confidence for March hit 96.2, above the expected reading of 94.
Investors also digested a five-year notes sale on Tuesday, the second of three offerings this week.
The Treasury Department auctioned $34 billion in five-year notes at a high yield of 1.335 percent. The bid-to-cover ratio, an indicator of demand, was 2.38.
Indirect bidders, which include major central banks, were awarded 53.9 percent. Direct bidders, which includes domestic money managers, bought 7.2 percent, the lowest amount since October.
Five-year notes yielded 1.2663 percent after the sale.
— CNBC's Everett Rosenfeld contributed to this report.