Treasuries: Greece is the word

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NEW YORK (CNNMoney) -- Once again, Greece is the No. 1 issue on Treasury investors' minds.

With the country's finances in dire straights, European officials failed to offer up a bailout package over the weekend. And early Monday, European finance ministers said Greece won't receive fresh loans until mid-July.

Meanwhile, the Greek Parliament is rushing to approve austerity measures -- bitterly opposed by rioters in the streets -- that would make the country eligible for a fresh bailout.

"The confidence they can handle this thing is gone," said William Larkin, a portfolio manager at Cabot Money Management. "The market is looking for a solution."

All the worry pushed the benchmark 10-year yield to its lowest level so far this year in early trading. Buying later eased, and yields were little changed at 2.94% by midday. Bond prices and yields move in opposite directions.

The pain of Greece's crisis

Investors are facing a economic data-heavy week at home. Federal Reserve Chairman Ben Bernanke will hold a press conference on Tuesday. And Congress appears to be making precious little progress on the debt ceiling.

But right now, Greece is at the fore, because of the implications of a default for other eurozone countries.

"If Greece does indeed default, it seems probable that it would trigger cascading effects that would reverberate throughout the European financial system and beyond," Kevin Giddis, managing director of fixed income at Morgan Keegan, wrote in a research note.

Yields on 10-year notes issued by Spain hit 5.59% on Monday, while Ireland was at 11.45% and Portugal reached 11.16%.

"The yields in Europe for the other PIIGS are problematic," Larkin said. "Portugal is at 11%. It wasn't too long ago that Greece was at that level."

What yields are doing: The 30-year yield fell to 4.20%, the 2-year yield decreased to 0.38% and the 5-year yield increased to 1.54%.

The 10-year note's yield was at 2.96%, up slightly from 2.94% late Friday.