US yields were also pressured by a drop in British yields to 2-1/2 year lows after Bank of England Governor Mark Carney cited risks from Brexit and trade conflicts in a speech that prompted speculation the BOE may lower interest rates in the next 12 months.

At the G20 summit in Japan last weekend, Washington and Beijing agreed to renegotiate after US President Donald Trump offered concessions, including no new tariffs and an easing of restrictions on tech company Huawei, while China approved making unspecified new purchases of US farm products.

While this development is seen as encouraging for the global economy, traders and investors remain cautious about a trade deal between the world's two biggest economies due to the lack of details about the resumption of talks.

"We're headed in a very good direction," White House trade adviser Peter Navarro said in an interview with CNBC television. "It's complicated, as the president said, correctly, this will take time and we want to get it right. So let's get it right."

Traders and investors have since shifted focus to the spate of weaker-than-expected manufacturing data around the world, which may push the US Federal Reserve and other major central banks to consider easing their monetary policies, analysts said.

"In general, the initial reactions post-G20 has faded a bit," said Jonathan Cohn, interest rate strategist at Credit Suisse. "We are seeing weakness in global PMIs."

Earlier Tuesday, the six-month business outlook among New York City's purchasing managers dropped to the lowest in a decade in June, the Institute for Supply Management-New York said.

The softening in manufacturing activity around the world stemmed largely from the trade conflict between the United States and its trading partners.

The cloudy economy outlook has underpinned the appeal of low-risk US government bonds.

Bond investors were the most bullish about owning US longer-dated government debt since May 28, a JPMorgan survey showed on Tuesday.

At 12:54 p.m. (1654 GMT), benchmark 10-year US Treasury note yields were down 5.40 basis points at 1.979pc.

They held above 1.974pc reached on June 20, which was their lowest since November 2016.