NEW YORK (MarketWatch) -- Treasury prices erased losses Tuesday, recovering after the government's international capital report showed foreign interest in U.S. securities remained high in April. Yields, which move inversely to bond prices, had been higher in earlier trading after the Federal Reserve Bank of New York said manufacturing conditions in the region improved this month. Yields on 2-year notes (UST2YR 0.73, -.00, -0.54%) fell 1 basis point to 0.74%. A basis point is 0.01%. Yields on 10-year notes (UST10Y 3.25, -0.01, -0.34%) stood little changed at 3.26%, retracing after having reached 3.31% earlier. The government said net foreign purchases of long-term U.S. securities totaled $110.9 billion in April, down from $157.7 billion in March. Read more on government's so-called TIC data. The New York Fed's Empire State Manufacturing index edged higher to 19.6 in June from 19.1 in May, remaining solidly in positive growth territory but well off the high of 31.9 seen in April. See more on Empire index. Yields had been higher in European trading hours as gains for U.S. stock futures and for equities in Europe and Asia lessened the investment appeal of the relative safety of U.S. debt. That came even after a major German indicator of economic sentiment fell sharply this month. Germany is Europe's largest economy. "The fact the friendly news is not helping Treasurys overnight continues to reinforce our skew that higher yields are needed to get people involved," said strategists at CRT Capital Group. On Monday, Treasurys pared losses after Moody's Investors Service downgraded Greece to junk status, with most of the day's gains in U.S. stocks disappearing late in the session. Read about bonds, Greece. Sill to come Tuesday is an index on builder confidence for this month.

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