U.S. Treasury yields retreated on Tuesday morning as investors continue to assess inflation, with key data out later in the week.
The yield on the benchmark 10-year Treasury note slid more than 5 basis points to 2.986%, having surpassed its highest level in almost a month on Monday, while the yield on the 30-year Treasury bond sank over 5 basis points to 3.139%. Yields move inversely to prices.
Yields surged, and a basis point is equal to 0.01% earlier this year as investors reacted to persistently high inflation ratings and a more hawkish outlook from the Federal Reserve. Yields settled back down in recent weeks before the 10-year yield jumped back above 3% on Monday, only to retrace that move on Tuesday.
May's consumer price index reading on Friday could be the week's marquee moment. Should last month's print come in lower than April's, markets could look to deduce that inflation has peaked, rendering the path of monetary policy slightly more predictable.
"With a lot of Fed tightening already priced into markets ... investors may also simply be waiting for the next big directional data point -- Friday's May CPI inflation report -- before adopting the next directional view," Chris Hussey of Goldman Sachs said in a note.
Investors are still trying to determine whether a recent resurgence in stocks is a bear market rally or a sign that the year's risk asset sell-off has bottomed.
Overseas, the Australian central bank hiked its benchmark interest rate by 50 basis point, joining the trend of tighter monetary policy.
-CNBC's Michael Bloom contributed to this report.