Continuing to recover from last Friday's sell-off, treasuries saw modest strength during trading on Tuesday but ended the session well off their best levels of the day.
After moving to the upside in early trading, bond prices gave back some ground over the course of the afternoon but managed to end the day modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 1.492 percent.
With the modest loss on the day, the ten-year yield further offset last Friday's 12.7 basis point gain but remains well off the record low set last Tuesday.
The modest strength among treasuries came as traders looked ahead to monetary policy decisions from both sides of the Atlantic.
The Fed is due to announce its latest monetary policy decision on Wednesday, while the European Central Bank is due to hold a monetary policy meeting on Thursday.
However, the upside for treasuries was limited by a batch of largely upbeat U.S. economic data, including a Conference Board report showing an unexpected improvement in consumer confidence in July.
Standard & Poor's also released a report showing a bigger than expected increase in home prices, while a report from the Institute for Supply Management - Chicago showed that Chicago-area business activity unexpectedly expanded at a faster rate in July.
Meanwhile, a separate report from the Commerce Department showed that consumer spending unexpectedly come in roughly flat in June despite a bigger than expected increase in personal income.
All eyes are likely to be on the Federal Reserve on Wednesday, with the central bank due to announces its latest monetary policy decision at about 2:15 pm ET.
The announcement from the Fed is likely to overshadow key U.S. reports on private sector employment, manufacturing activity, and construction spending. (RTTNews)
What are today's top 50 stocks? This free list will share the big market movers on a daily basis to help you find trading opportunities.