U.S. government debt yields fell Tuesday as hopes for stimulus in major economies appeared to soothe investor concerns about a possible global recession.
Market participants were cheered by signs policymakers appeared willing to do more to support their economies amid international trade frictions, led by a protracted dispute between the U.S. and China.
Investors are bracing for a potentially dovish Federal Reserve at a Jackson Hole, Wyoming meeting later this week, as they will be looking for clues of monetary policy settings.
It comes at a time when reports suggest that Germany is preparing to increase fiscal spending, and after China's central bank took steps to lower borrowing costs.
Last week, the U.S. bond yield curve inverted, a sign that many investors say presages a recession. The curve of 2-year and 10-year Treasury yields, however, remained steeper on Tuesday, but could invert again based on past cycles.
There are no major Treasury bond auctions scheduled on Tuesday.