Treasuries move up

US Treasury debt prices rose on Tuesday as worrisome domestic data overshadowed optimism that Greece is closer to receiving fresh aid, reviving another run of the 10-year yield to 3 percent. The day's gains, due in part to month-end portfolio re-balancing and the Federal Reserve's purchase of long-dated debt, marked an end to a solid month for Treasuries.
The benchmark 10-year yield is on track for its second monthly decline, with the Federal Reserve due to conclude its second round of bond purchases in June.
Barclays Capital's total return on Treasuries has risen 1.42 percent on the month through Friday, bringing its year-to-date increase to 2.43 percent.
"Prospect for US growth has been euphoric coming into the beginning of the year. I think more people are trying to downwardly revise their economic forecasts," said Bill Chepolis, portfolio manager at DWS Investments, a US unit of Deutsche Bank's global asset management group that oversees more than $129 billion in the United States.
Tuesday's weak figures on housing, Midwest manufacturing and consumer confidence supported the renewed appeal of bonds.
If the government's monthly payroll report due out on Friday signals a sharp fall in hiring, the current bond rally is seen likely to continue, with the 10-year yield poised to pierce below 3 percent, a level not seen since early December.
Benchmark 10-year notes on Tuesday were up 2/32 in price from Friday's 3 pm close for a yield of 3.06 percent. The 10-year yield tested several major resistance levels in May, including 3.05 percent, which is the 50 percent retracement between the rise from October to February.
The 30-year bond was up 5/32 to yield 4.23 percent. It had been down as much 18/32 in overseas trade, touching a yield of 4.27 percent. The 30-year yield has fallen 15 basis points on the month.
The turnaround in the 30-year bond stemmed in part from the Fed's purchase operation. The US central bank bought $1.92 billion in Treasuries that mature in August 2028 to May 2040.
Long-dated Treasuries also received a boost from money managers buying them to match month-end changes to their portfolio indexes, traders and investors said.
Traders briefly lightened their safe-haven Treasuries holdings on that report.