U.S. Treasurys prices ended little changed on Tuesday after the Treasury's $32 billion three-year note sale drew solid demand.
A quiet morning yielded to some more active pockets of trading in tight ranges across the curve, said Justin Lederer, Treasury strategist at Cantor Fitzgerald & Co. in New York. Treasurys traded on the heavy side at first as traders cut prices ahead of the Treasury's auction, he said. The price concessions, and higher yields, drew buyers to auction.
The strong results were evidenced by a 3.21 ratio of bids received over those accepted. After the auction, the market pared narrow losses, leaving it little changed on the day. The market faces more supply challenges in the next two days as the Treasury executes the second and final parts of its three-part August refunding, selling $24 billion in 10-year notes on Wednesday and $16 billion in 30-year bonds on Thursday.
(Read more: Now even Fed dove sees taper soon)
Meanwhile, the Federal Reserve is set to buy coupons at the long end of the maturity curve on Wednesday, another of the large-scale purchases it has committed to in order to foster economic growth and lower unemployment.