U.S. government debt prices were lower on Tuesday, following their European counterparts, as European Central Bank President Mario Draghi raised the possibility of monetary policy changes.
Draghi said the ECB could adjust its policy tools of sub-zero interest rates and massive bond purchases as economic prospects improve in Europe.
But any change in the bank's stance should be gradual, as "considerable" monetary support is still needed and the rebound in inflation will also depend on favorable global financing conditions, he added.
US 10-year yield intraday chart
European yields also spiked, with the German 10-year yield trading near 0.34 percent and the UK 10-year yield advancing to trade at 1.078 percent.
Investors also digested a major Treasury department sale. The Treasury Department auctioned $34 billion in five-year notes at a high yield of 1.828 percent on Tuesday.
The bid-to-cover ratio, an indicator of demand, was 2.33.
Indirect bidders, which include major central banks, were awarded 65.2 percent. Direct bidders, which includes domestic money managers, bought 9.2 percent.
The five-year yield traded higher at 1.822 percent following the sale.
The moves higher come as a whole host of officials from the Federal Reserve are set to speak on Tuesday, with investors keeping an eye out for any hints as to how the U.S. economy is performing.