By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices fell slightly Monday, pushing yields up from near the lowest levels seen since December, as traders try to gauge how much demand will materialize for the government’s auction of 2-year notes later in the session.
The short-term security’s yield has been bouncing around near a record low, which gives some indication of demand for the relative safety of Treasury bonds due to high uncertainty about Greece and Europe’s ability to resolve its debt problems.
Yields on 10-year notes 10_YEAR -0.31% , which move inversely to prices, rose 1 basis point to 2.87%. A basis point is 1/100 of a percent.
Yields on 2-year notes 2_YEAR +5.92% rose 2 basis points to 0.35%, after touching 0.31% during the Asian trading session.
Thirty-year bond yields 30_YEAR +0.41% increased 2 basis points to 4.21%.
The next big hurdle for Greece is a vote Wednesday by its parliament on a set of budget-cutting measures required to receive the next round of the international bailout devised last year.
“We have the Greek austerity vote, which seems the all-important hurdle to get over with what we think are the obvious outcomes — it passes and we sell off or it fails and we rally hard,” said bond strategists at CRT Capital Group.
Also on tap is one of the Federal Reserve’s last bond purchases as part of its second round of quantitative easing.
Treasurys stayed down after a report showed U.S. consumer spending was flat in May, while economists expected a small increase. Incomes rose 0.3% on the month. Read more about the weakest U.S. reading on consumer spending in nearly a year.
The sale of $35 billion in 2-year notes will close at 1 p.m. Eastern time. See results of recent Treasury auctions.
Last week, Treasury prices rose and bond yields fell for at least the sixth week due to worries surrounding Greece as well as weakening U.S. economic data. Read more on rally in Treasurys.
