After failing to sustain an early upward move on Monday, treasuries pulled back near the unchanged line, ending the day nearly flat.
Bond prices pulled back off their early highs over the course of the morning and showed a lack of direction for the remainder of the session.
Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.584 percent after hitting an early low of 1.56 percent.
The early strength among treasuries came as traders expressed continued concerns about the financial situation in Europe despite seemingly positive election results in Greece.
While the closely watched Greek elections resulted in a victory for the pro-bailout New Democracy party, worries about continued problems drove Spanish and Italian bond yields notably higher.
Nonetheless, traders seemed reluctant to make any significant moves ahead of the Federal Reserve's monetary policy meeting.
Many traders expect the Fed to announce additional stimulus measures when it releases its post-meeting statement on Wednesday.
A relatively upbeat housing report contributed to the subsequent pullback by treasuries, with a report from the National Association of Home Builders showing its reading on homebuilder confidence at a five-year high in June.
The report showed that the NAHB/Wells Fargo Housing Market Index crept up to 29 in June from a downwardly revised 28 in May. Economists had expected the index to come in unchanged compared to the 29 originally reported for the previous month.
With the modest increase compared to the previous month's revised reading, the index was it its highest level since coming in at 30 in May of 2007.
Additional housing data is scheduled to be released on Tuesday, as the Commerce Department is due to release its report on new residential construction in the month of May.
Economists expect housing starts to climb to an annual rate of 720,000 in May from 717,000 in April, while building permits are expected to rise to an annual rate of 736,000 from 715,000.
by RTT Staff Writer
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