By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices turned slightly lower on Tuesday, as traders guess whether investor demand for the government sale of 5-year notes will be better than the prior day’s sale.
Treasurys had more support earlier as markets remain cautious about the outcome of key votes in Greece in the next couple days to avoid a default.
Yields on 2-year notes 2_YEAR +10.67% , which move inversely to prices, rose 3 basis points to 0.45%. A basis point is 1/100th of a percentage point.
Yields on maturities up to the 7-year note 7_YEAR +1.42% also rose.
Yields on 10-year notes 10_YEAR +0.75% erased an earlier gain to sit little changed at 2.94%.
Thirty-year bond yields 30_YEAR -0.02% remained down 1 basis point at 4.29%.
The main event of the day will be the U.S. government’s auction of 5-year notes 5_YEAR +2.82% . Results will be released after 1 p.m. Eastern time.
A sale of 2-year notes on Monday garnered weak demand from investors who shunned the notes carrying the lowest yield on record for an auction. Read about 2-year bond auction.
“The fact that investors stepped away from the market in unison is likely due to the fact that there was some degree of sticker shock,” said strategists at Nomura Securities.
Treasury bonds rose modestly in earlier trading “as the market waits for both new Treasury supply and the outcome of the Wednesday/Thursday Greek austerity vote,” strategists at RBS Securities wrote in a note. Read more on Greece, the U.S. dollar.
The bond market took little direction from a report showing U.S. home prices rose in April.
