Treasuries decline

US Treasuries prices fell on Wednesday as the safety bid for US government debt ebbed on the view that eurozone leaders were making progress on a plan to ease Greece's debt burden. US Treasuries have been variously buffeted by worries about the European debt crisis and a potential US default.
Concern about European sovereign debt and the banks that hold it have fed a persistent demand for what has commonly been viewed as a safe-haven: US government debt. Conversely, when constructive steps are made on the eurozone debt predicament, demand for US Treasuries wanes.
Euro-zone leaders are due to meet on Thursday to determine means of tackling Greece's spiralling debt crisis.
"Some type of package should help ease some of the concerns there," said Tom Tucci, head of government bond trading at RBC Capital Markets in New York. The five-year Treasury notes fell 5/32 in price, its yield rising to 1.48 percent from 1.43 percent on Tuesday.
Longer-term Treasuries have borne the brunt of developments on the domestic front, most prominently from efforts to reach a long-term US debt-reduction deal less than two weeks before Congress must raise the US debt ceiling to avoid a default.
Ironically, nervousness about the outcome of this conflict has sometimes spurred a safe-haven bid for US debt. But long-dated Treasuries have been whipsawed by frequently shifting perceptions on what size debt reduction, if any, will occur.
Talk of large deficit cuts tends to boost the price of long-term Treasuries. When those cuts look less certain, Treasuries prices erase some of those gains.
On Tuesday, 30-year bonds scored their biggest gain in eight months on talk that a bipartisan group of US senators had revived a budget plan some said could break the impasse over the debt ceiling. Doubts about the plan returned on Wednesday, however, causing the long bonds to reverse nearly half of that gain.
Thirty-year bonds fell 31/32 in price, their yields rising to 4.25 percent from 4.19 percent on Tuesday.
Benchmark 10-year notes slid 13/32 in price, their yields rising to 2.93 percent from 2.89 percent. Analysts said markets were waiting for clarity.