Treasuries Close Roughly Flat Following Choppy Trading Day

(RTTNews) - After recovering from an early move to the downside, treasuries showed a lack of direction throughout much of the trading day on Tuesday before closing roughly flat.

Bond prices spent the day bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.335 percent.

The choppy trading came as traders digested the latest developments regarding Greece, which appears set to default on a 1.55 billion euro payment due to International Monetary Fund.

The potential default comes as the Greek government prepares to hold a public referendum on Sunday on the bailout proposals offered to the country.

German Chancellor Angela Merkel has said any new talks would have to wait until after the Greek referendum, brushing off reports of a new round of negotiations.

However, Malta's Prime Minister Joseph Muscat told parliament Greece has offered to suspend its planned referendum if negotiations are reopened and an agreement is reached.

"They are ready to suspend their referendum or ask the people to vote 'yes' instead of 'no' if a package is put on the table with which they could agree," Muscat said.

At the same time, Muscat warned that the offer from Greece could be either a breakthrough or just a ploy to gain more time.

Strategists at Bank of America Merrill Lynch said, "Greece continues to dominate the headlines again, with a surprising referendum likely to drive near-term sentiment."

"Still, for our broader macro view, we continue to expect robust U.S. growth, a stronger U.S. dollar and a Fed rate hike in September," they added.

With the focus on Greece, traders largely shrugged off the latest batch of U.S. economic data, including reports on home prices, consumer confidence and Chicago-area business activity.

News out of Greece is likely to remain in the spotlight on Wednesday, potentially overshadowing U.S. reports on private sector employment and national manufacturing activity.