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Treasury yields rise as traders look ahead to central bank decisions

U.S. government debt yields ticked higher on Tuesday as traders awaited key monetary policy decisions from the European Central Bank (ECB) this week and the Federal Reserve next week.

U.S. Markets Overview: Treasurys chart

At around 5:02 p.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 2.083%, while the yield on the 30-year Treasury bond climbed to 2.617%.

Market focus is largely attuned to central banks, with the ECB monetary policy meeting coming up on Thursday ahead of the U.S. Federal Reserve's Federal Open Markets Committee (FOMC) meeting next week.

Traders are waiting to see whether European policymakers will lower a key deposit rate by 10 basis points in order to mitigate risk of global trade tensions and sub-par regional inflation.

ECB President Mario Draghi suggested in a speech in Sintra last month that further stimulus may be necessary for the euro zone, while investors stateside have been processing mixed messages from senior figures at the Fed.

Late last week, dovish comments by New York Fed President John Williams had boosted expectations the central bank could cut rates by 50 basis points. However, the New York Fed sought to clarify Williams' comments by saying his speech was not about policy action at the upcoming central bank meeting.

Global growth concerns and ongoing trade uncertainties could prompt the Fed to make further cuts over the coming months. Slower GDP growth in the euro zone and Asia have kept investors on-edge in recent months despite stronger performance in the U.S.

The Treasury Department auctioned $39.7 billion in 2-year notes at a high yield of 1.825%. The bid-to-cover ratio, an indicator of demand, was 2.50. Indirect bidders, which include major central banks, were awarded 43.5%. Direct bidders, which includes domestic money managers, bought 24.9%.