Prices rise as Germany dampens EU summit optimism

Thirty-year yields came off one-month peaks as well, as the Treasury market took on a bid tone after the German news, which has also weighed on US stocks.

On Monday, German Finance Minister Wolfgang Schaeuble said European governments will not present an ultimate solution for the sovereign debt crisis at the summit. For more, click on.

"There's nothing but uncertainty in Europe," said David Ader, head of government bond strategy at CRT Capital in Stamford, Connecticut.

"This weekend and today is the perfect example. October 23 seems to be the deadline for a plan for Europe, but the Germans are balking."

In early morning trading, benchmark 10-year US Treasuries rose 14/32 in price to yield 2.2. percent, coming off seven-week highs.

US 30-year bonds traded up 1-2/32 in price to yield 3.19 percent. Yields rose as high as 3.29 percent, their strongest in a month on Monday

An Empire State index that came in worse than expected at -8.48 in October, compared with market forecasts of -4.0, also proved a positive for Treasuries. Although the components were not as bad as the headline number, the data overall suggested little improvement in the factory sector in one of the country's most important manufacturing states, analysts said.

Copyright Reuters, 2011