NEW YORK: US government debt prices held steady on Monday as the lack of progress in Greece to meet required terms for a bailout rekindled worries about a disorderly default, bringing some buyers back into the bond market.
Longer-dated Treasuries prices also garnered support from trader demand in advance of the Federal Reserve's expected purchase of $1.5 billion to $2 billion in debt due in 2036 to 2041.
"It's all coming back down with the Greek talks right now," said Mike Franzese, head of Treasuries trading at Wunderlich Securities in New York.
Greece let yet another deadline slip on Monday for responding to painful terms for a new EU/IMF bailout as patience among European leaders wore thin over drawn-out negotiations among its feuding political leaders. Failure to strike a deal to secure the 130 billion euro ($170 billion) rescue risks pushing the heavily indebted nation into a chaotic default which could threaten its future in the euro zone.
The early safe-haven bids for Treasuries was curbed by some optimism about US economy after Friday's stronger-than-expected payrolls data that showed the monthly jobless rate fell to a near three-year low.
However, some economists have downplayed the notion that even the traction in the employment picture would deter the US central bank from backing away from yet another round of large scale purchase of mortgage-backed securities and keeping interest rates exceptionally low until at least late 2014.
"People doubt the Fed will change its stance right now," Franzese said.
Benchmark 10-year Treasury notes were little changed in price at 100-23/32 for a yield of 1.92 percent, while 30-year bonds climbed 5/32 at 100-6/32 with their yield dipping 1 basis point to 3.12 percent.
The 10-year and 30-year yield rose 10 basis points and 12 basis points, respectively on Friday, their biggest one-day gains in about 7-1/2 weeks.
After last week's heavy calender of economic data, there will be no major US data releases on Monday.
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