US Treasury yields dropped on Tuesday as investors shifted some cash back into the bond market, prompted by worries over slowing global growth and trade tensions between China and the United States. A record-long US government shutdown also fed safe-haven demand for Treasuries, with benchmark 10-year yields retreating from three-week peaks set last week.

One of the hurdles to Washington and Beijing resolving their trade spat is the case of Meng Wanzhou, executive of Chinese technology giant Huawei, who was arrested on December 1 in Vancouver for violating US sanctions on Iran. In addition to trade tensions with the US, China is seeking to combat weakening domestic growth that slowed to 6.6 percent in 2018, its lowest annual level since 1990.

The yield on benchmark 10-year Treasury notes was 2.737 percent, down 4.5 basis points from Friday's close. It reached a three-week peak at 2.799 percent on Friday.

Copyright Reuters, 2019