Month-end buying prompted by index extensions had supported bonds on Monday.

Now, "it is the first day of the month so month-end buying pressures from July are behind us," said Ian Lyngen, head of US interest rate strategy at BMO Capital Markets in New York.

Investors were also waiting on a busy week of economic data releases, which will culminate in Friday's US employment report for July.

Data on Tuesday showed that US consumer spending barely rose in June as income failed to increase for the first time in seven months, pointing to a moderate pace of consumption growth in the third quarter.

A manufacturing report later on Tuesday and services and non-manufacturing data on Thursday will be watched for further indications of the strength of the US economy, with the main economic focus on Friday's payrolls number.

The market is in "a holding pattern into payrolls and average hourly earnings on Friday," said Lyngen.

Benchmark 10-year notes were last down 7/32 in price to yield 2.32 percent, up from 2.29 percent late on Monday.

The Treasury Department's quarterly refunding announcement on Wednesday will be scrutinized for any indication of how the government plans to make up for a reduction in Federal Reserve bond purchases once the US central bank begins paring them.

Investors will also be focused on whether the government plans to introduce a new ultra-long bond, or revive a 20-year issue, which Treasury Secretary Steven Mnuchin has said would be beneficial for the government's funding mix.