Wall Street was expected to open sharply lower after US President Donald Trump on Sunday threatened to increase tariffs

on $200 billion of Chinese-made goods to 25pc from 10pc, reversing his February decision to hold them at 10pc as the world's two biggest economies were making progress on trade negotiations.

Investors fear that derailed trade talks between and Beijing would touch off a global slowdown, analysts said, which offset recent encouraging data on China, Europe and the United States.

"Though the high-frequency flow of economic releases has improved, rising global tensions and fears that the US will impose additional tariffs against China are weighing down investor sentiment," Stan Shipley, a strategist at Evercore ISI wrote in a research note.

Monday's drop in bond yields was mitigated by this week's Treasury supply.

The US Treasury Department will sell $84 billion in coupon-bearing debt including $38 billion in three-year notes , $27 billion in 10-year notes and $19 billion in 30-year bonds.

At 9:13 a.m. (1313 GMT), the yields on benchmark 10-year Treasury notes were 2.4818pc, down 4.8 basis points from late on Friday, while the two-year yields were 2.2884pc, down 5.1 basis points.