By Cordell Eddings and Anna Rascouet (Corrects first paragraph to say jobless claims fell more than forecast.) Feb. 11 (Bloomberg) -- Treasury 10-year note yields touched a three-week high as European leaders said they reached an accord on Greece’s debt crisis, the U.S. prepared to sell $16 billion of 30-year bonds and initial jobless claims fell more than forecast. Government debt slipped as a Labor Department report showed initial claims for unemployment benefits declined to 440,000 for the week ended Feb. 6, compared with a forecast by economists of a drop to 465,000. “There is an accord,” European Commission President Jose Barroso told reporters after the leaders of Greece, France and Germany met in Brussels. “Jobless claims were less bad than expected, which is weighing on Treasuries some, but today is still all about Greece and supply,” said Ira Jersey, an interest-rate strategist at Royal Bank of Canada in New York, one of 18 primary dealers that trade directly with the Federal Reserve. The yield on the 10-year note rose two basis points, or 0.02 percentage point, to 3.71 percent at 8:46 a.m. in New York, according to Bloomberg generic prices. It touched 3.72 percent, the highest level since Jan. 19. Greek bonds rose after Euro-region leaders ordered Greece to get the bloc’s highest budget deficit under control and said they are prepared to take “determined” action to staunch the worst crisis in the currency’s 11-year history. Plans by Greek Prime Minister George Papandreou to cut the EU’s highest budget deficit have triggered street protests. ‘Before Long’ Treasuries slid yesterday as Federal Reserve Chairman Ben S. Bernanke said in prepared testimony that policy makers may raise the discount rate, charged on direct loans to commercial banks, “before long.” Bernanke repeated the Federal Open Market Committee’s statement that low interest rates are warranted “for an extended period.” The Fed will lift its target for overnight lending between banks, now in a range of zero to 0.25 percent, to 0.5 percent in the third quarter, according to a Bloomberg survey of banks and securities companies. “Bernanke’s remarks weighed on Treasuries,” a team of analysts at Unicredit SpA, including Roberto Mialich in Milan, wrote in a research note today. “The Fed’s exit strategy is likely to continue to weigh on them in the coming days.” Rate Boost Bets Futures contracts on the Chicago Board of Trade show traders see a 21 percent chance the Fed will lift the target rate by June, from 16 percent a week ago. The pre-auction yield on the 30-year bonds scheduled for sale today was 4.69 percent. Investors bid for 2.68 times the amount on offer last month, versus an average of 2.48 for the past 10 sales. Indirect bidders, the group that includes foreign central banks, bought 40.7 percent of the securities, versus the 10-sale average of 43.2 percent. Yesterday’s bidding results may have cost the Treasury as much as $32 million in interest over the life of the debt, based on the 1.6-basis-point spread between the auction and pre-market yields, according to Bloomberg data. Investors bid for 2.67 times the 10-year debt on offer, compared with an average of 2.76 at the past 10 sales. The Treasury also sold $40 billion of three-year notes on Feb. 9, bringing this week’s total to $81 billion, tying a record for this combination of securities. To contact the reporters on this story: Cordell Eddings in New York at ceddings@bloomberg.net; Anna Rascouet in London at arascouet@bloomberg.net

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