Ten-year notes fell 11/32 in price to yield 2.01 percent, compared with 1.97 percent in late US trade, as US stock futures gained more than 0.6 percent. Germany and France stepped up a drive for coercive powers to reject euro zone members' budgets that breach EU rules in a move seen as a step towards a euro zone fiscal union, which many investors hope could avert a breakdown on the currency bloc. Euro zone finance ministers are to meet on Tuesday and are expected to agree on details to bolster their bailout fund to help prevent contagion in bond markets. Still, many market players think the worst is not over for Europe, as bond prices of many euro zone countries, including German Bunds in recent days, remained under pressure. "The problem is getting severer and severer. The question is whether Germany will compromise and step up support but German public opinion seems to be opposed," said a fund manager at a US asset management firm. In the United States, retailers racked up a record $52.4 billion in sales over the Thanksgiving weekend, a 16.4 percent jump from a year ago, according to an industry trade group, also easing worries about the US economy. Treasuries prices were little impacted by data on Monday showing sales of new US single-family homes rose in October and the supply of homes on the market fell to the lowest level since April of last year.