WASHINGTON (dpa-AFX) - Treasuries initially extended their recent upward trend but gave back ground over the course of the trading session on Tuesday.
Bond prices pulled back well off their early highs and into negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.0 basis points to 4.210 percent after hitting a low of 4.106 percent.
The early strength among treasuries came amid concerns about a global trade war after President Donald Trump's new tariffs on imports from Canada, Mexico and China took effect.
However, buying interest waned over the course of the session and traders subsequently cashed in on recent strength in the bond markets, with the ten-year yield bouncing off its lowest intraday level since October.
The White House said Trump is proceeding with implementing previously paused 25 percent tariffs on Canada and Mexico to combat the extraordinary threat to U.S. national security posed by unchecked drug trafficking.
Trump also increased the tariff on Chinese imports to 20 percent from 10 percent, claiming the country has not taken adequate steps to alleviate the illicit drug crisis.
Canada responded by announcing 25 percent retaliatory tariffs on C$155 billion of American goods, starting with tariffs on C$30 billion worth of goods immediately and tariffs on the remaining C$125 billion in 21 days' time.
In a subsequent post on Truth Social, Trump said Canada putting a retaliatory tariff on the U.S. will lead to a reciprocal tariff by the same amount.
Meanwhile, Mexican President Claudia Sheinbaum said her government has made 'contingency plans' to respond to the new tariffs.
China also said it would impose additional tariffs of 10 to 15 percent on several agricultural goods, including soybeans, corn, dairy and beef.
Trading on Wednesday may be impacted by reaction to the latest U.S. economic data, including reports on private sector employment, service sector activity and factory orders.
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