Are You Buying the Bond Rally?

How low can bonds go?

Junk or Jewels? The Lowdown on High-Yield Bonds
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U.S. Treasury debt prices were last nearly flat after earlier rising on Tuesday on increased safe-haven buying spurred by investor concern about a delay in payment of aid to debt-laden Greece, souring German investor sentiment and a potential U.S. fiscal crisis.

In earlier trade, Treasurys extended last week's gains, which followed President Barack Obama's re-election, as investors fretted about political brinkmanship by Democrats and Republicans over $600 billion in spending cuts and tax hikes due to come into effect early next year which could send the economy back into recession.

U.S. lawmakers have seven weeks to hammer out a compromise to avoid the so-called "fiscal cliff". Greece is also at the forefront of investors' minds again.

A euro zone finance ministers' meeting on Monday gave Athens two more years to make cuts demanded of it but held off disbursing more aid as the euro zone and International Monetary Fund clashed over a longer-term target date to shrink the country's debt pile. (Read More: Trouble Brewing for Euro as Greece Worries Grow)

The risk-on mood was also supported by data showing analyst and investor sentiment unexpectedly fell in Germany, Europe's largest economy, in November.

Benchmark 10-year Treasury notes were last 1/32 lower in price to yield 1.597 percent, down from 1.61 percent late Friday. The yield touched 1.57 percent on Tuesday, marking the lowest in 10 weeks.

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