By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices fell and yields rose Tuesday amid reports that further budget cuts will be coming from Greece, easing fears about a new debt-driven meltdown and reducing the relative investment appeal of U.S. debt.
Yields on 10-year notes (UST10Y 3.63, +0.03, +0.80%) rose 3 basis points to 3.64%.
Yields on 2-year notes (UST2YR 0.81, +0.01, +1.51%) increased 1 basis point to 0.82%.
Bond prices move inversely to their yields. A basis point is 0.01%.
"The markets are struggling day-to-day as to the potential success or failure of [Greece's] effort to reduce its deficit and carry out its plan for an 'austerity' program," said Kevin Giddis, managing director of fixed income for Morgan Keegan & Co.
"This is why we are seeing a 'bounce' up and down in the flight-to-quality trade, and we likely will continue to until this issue is either settled or some big shoe drops," he added.
Also, the Reserve Bank of Australia raised interest rates, as expected, adding to signals that the global economy is recovering. See more on RBA rate hike.
"The downward pressure was aided by the RBA rate increase and further progress on resolving the Greece situation," said strategists at CRT Capital Group.
Greek bond prices improved, pushing yields down, as Athens is expected to announce more ways to reduce its deficit before bringing a much-needed bond deal to the market, according to Andrew Brenner, head of emerging markets at Guggenheim Securities. See WSJ story on Greece.
There are no U.S. economic reports scheduled for release Tuesday. Automakers will be reporting car sales for February.
