The modest bounce in US yields followed four straight sessions of scorching declines as investors rushed into US government debt to shield their money from stocks and other risky assets in response to rising trade friction between China and the United States and bets on more stimulus from global central banks to combat slowing business activity.

Investors are expected to place solid bids for the latest three-year note supply, which is likely to fetch its lowest yield in nearly two years, analysts said.

"For the three-year, we expect decent end-user demand given the significant global concerns and expectations for major global central banks to ease monetary policy going forward," said Justin Lederer, Treasury strategist at Cantor Fitzgerald in New York.

Some selling in US bonds emerged on Tuesday as investor fears were held in check after China kept its currency in a slightly stronger level a day after it let the yuan weaken to seven to a dollar, a level not seen in a decade.

That decision from Beijing, together with Chinese state media saying on Monday local companies suspended their purchases of American agricultural goods, touched off a massive sell-off in stock markets around the world and a safe-haven stampede into Treasuries, yen and gold.

Late Monday, US Treasury Secretary Steven Mnuchin designated China a currency manipulator, kicking off a formal process of bilateral negotiations between the world's two largest economies.

Worries of rising tensions between China and the United States and growing drag on the global economy led a rush of buying of Treasuries, pushing US 10-year yields to 1.672pc overnight, marking their lowest level since Oct. 5, 2016.

At 8:31 a.m. (1231 GMT), benchmark 10-year yields were up 1.7 basis points at 1.753pc.

The yields on other Treasuries maturities also rebounded from their recent lows.

The two-year yield, which is sensitive to traders' view on Fed policy, was up 2 basis points at 1.603pc after hitting 1.529pc, which was its lowest level since October 2017.

The deterioration in trade talks between China and the United States has stoked bets the Federal Reserve would increase the number of rate cuts it hinted at last week.

Interest rate futures implied traders were fully positioned for the US central bank to lower key lending rates by at least a quarter-point at its Sept. 17-18 policy meeting, according to CME Group's FedWatch program.