Treasuries halted a four-day advance on speculation U.S. lawmakers will reach a deal to avert the so- called fiscal cliff of tax increases and spending cuts, undermining demand for the safest assets. Ten-year notes trimmed a weekly gain before an industry report that economists said will show business activity expanded in November, adding to signs the U.S. is recovering. More than $600 billion of tax increases and automatic spending cuts will start in January if no deal on the fiscal cliff is reached. The Congressional Budget Office has said failure to reach an accord may push the economy into a recession. “Behind the scenes we think there is some slow progress on the fiscal cliff,� said Vincent Chaigneau, global head of interest-rate strategy at Societe Generale SA in Paris. “Risk sentiment is going to be quite positive going into the end of the year and bond prices will pull back. Worries that the discussions are not progressing quickly enough has supported prices over the past few days.� The U.S. 10-year yield rose one basis point, or 0.01 percentage point, to 1.62 percent at 9:37 a.m. London time, according to Bloomberg Bond Trader prices. The 1.625 percent note maturing in November 2022 dropped 2/32, or 63 cents per $1,000 face amount, to 100 1/32. The yield fell seven basis points this week. Treasury Secretary Timothy F. Geithner shuttled among congressional leaders yesterday with a plan to trade $1.6 trillion in tax increases for $400 billion in unspecified entitlement program cuts, Republican congressional aides said. To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net. To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net.

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