"We have clearly taken out the Greek risk as far as it impacted Treasuries," said David Ader, head of government bond strategy at CRT Capital Group LLC in Stamford, Connecticut. "From this day forward, we will have to deal with the Treasury supply on our own. We are adjusting to the new world."

Yields on benchmark 10-year Treasury notes dropped to 2.84 percent on June 27, the lowest since December, before ending the month at 3.16 percent. The yield rose 1 basis point today.

Greek Yields

Greek two-year note yields fell two basis points, or 0.02 percentage point, to 27.30 percent yesterday. They climbed to a record 30.32 percent on June 16 as Papandreou struggled to win support for budget cuts and S&P cut the nation's debt ranking to CCC, the world's lowest sovereign rating. The yield dropped a further 63 basis points today.

The worst may not be over for Greece, even after the nation's parliament passed the first part of an austerity plan, said Andrew Balls, Pacific Investment Management Co.'s head of European fund management.

"The challenges on the fiscal side look very large indeed," Balls said June 29 in an interview on Bloomberg Television's "In the Loop" with Betty Liu. "My concern is we'll be back here in a few weeks, or a couple of months, when we have another real stressful period again because the program will be going off track."

U.S. Unemployment

U.S. unemployment reached 9.1 percent in May and the Conference Board's consumer sentiment index dropped to 58.5 from 61.7, figures from the New York-based private research group showed June 28. Home values in 20 cities declined 4 percent in the 12 months through April, according to the S&P/Case-Shiller index.

"The data were definitely on the weak side through the month," said Thanos Bardas, a managing director in Chicago at Neuberger Berman LLC, which oversees about $85 billion in fixed- income assets. "A self-sustaining economy is all about jobs."

Wheat futures traded in Kansas and Chicago led the decliners among commodities in June, dropping 18 percent and 17 percent respectively, followed by silver and natural gas. Sugar soared 26 percent, paring the year-to-date loss to 9.2 percent.

Concerns about the pace of U.S. recovery and China's rising interest rates discouraged investors from buying commodities, curbing gains from the rally that started in July 2010, said Tobias Merath, the Zurich-based head of commodities research at Credit Suisse Group AG. Raw materials were advancing "too quickly" during the first four months of this year, the analyst said.