Bonds

Treasury yields fall slightly as US-China trade remains in focus

U.S. government debt prices were slightly higher and yields lower on Tuesday, amid doubts about the prospect of a trade deal between the world's two largest economies.

Treasurys

The yield on the benchmark 10-year Treasury note, which moves inversely to price, was slightly lower at around 1.7817%, while the yield on the 30-year Treasury bond was also lower at around 2.2527%.

Market focus is largely attuned to global trade developments, as investors await clearer news on whether the U.S. and China will reach a preliminary accord to end a protracted dispute.

The mood in Beijing was pessimistic, a Chinese government source told CNBC's Eunice Yoon on Monday, citing President Donald Trump's reluctance to roll back tariffs.

The two economic giants had agreed to work on a limited "phase one" trade deal in early October. China has also pushed for a removal of the additional duties imposed on one another's products in different phases, as part of the deal.

Earlier this month, Chinese Commerce Ministry spokesperson Gao Feng said the U.S. and China had secured an agreement on the tariff rollback. However, Trump said last week that he had not signed up to scrap tariffs on Chinese goods, contradicting the signal from Beijing and dampening hopes of an imminent resolution to the trade conflict.

The U.S. and China have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

On the data front, housing starts for October will be released at around 8:30 a.m. ET.

There are no major Treasury bond auctions scheduled on Tuesday.