Treasurys decline on Greek woes

By Chavon Sutton, staff reporter


NEW YORK (CNNMoney.com) -- Treasury prices fell Tuesday after the government issued $40 billion of 3-year notes and investors remained skiddish over debt issues in Europe.

What prices are doing: The benchmark 10-year note fell 18/32 to 97 28/32, pushing up the yield to 3.65% from 3.56% late Monday. Bond prices and yields move in opposite directions.

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The 30-year bond slipped 18/32 to 96-25/32 and its yield was 4.58%. The 5-year note fell 11/32 to 99 23/32, yielding 2.31%. The 2-year note ticked down 3/32 to trade at 100 3/32, and it yielded 0.83%.

What's moving the market:

Overall, market analysts considered the the auction a moderate success, considering the uncertainty in international debt markets.

"This [auction] was about average," said Kim Rupert, managing director of fixed income analysis for Action Economics, LLC, who expected better results for the short-term notes.

Investors submitted bids totaling $113 billion for the $40 billion worth of notes sold. The bid-to-cover ratio, which gauges demand, was 2.83. That compares with 2.98 at the last sale of 3-year notes in January.

An easing of concerns about a possible bailout of Greece kept prices slightly lower in earlier trading, but Treasury prices fell deeper after news of potential support from Germany.

What's on tap: The Treasury Department will offer another $40 billion in new debt this week, including $25 billion in 10-year notes Wednesday and $14 billion in 30-year bonds on Thursday.

The auctions, which make up the government's quarterly refunding, will settle on Feb. 16.

Treasury prices typically fall ahead of government auctions, as investors adjust portfolios for the new supply. Rupert expects continued uncertainty over Greece to bode well for this week's remaining auctions.  To top of page

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