NEW YORK (CNNMoney.com) -- Treasury prices moved higher Tuesday with the expectation that more dour economic data will again lead investors to shy away from stocks and commodities.
Finding little in the way of return on investment in other markets, investors have placed conservative bets on the bond market. Recession fears and credit crisis anxiety have sent stocks falling in eight of 11 sessions thus far in November. Likewise, bonds have risen in seven of 10 sessions. The bond markets were closed on Veteran's Day while equities markets were open.
A government report on inflation for the month of October showed wholesale prices fell by 2.8%. The huge decline showed consumer demand for goods continues to fall sharply. Consumer prices rose 0.4%.
Bonds may continue to rise for the rest of the week, which will bring a number of other economic indicators that are expected to be equally as disappointing. Investors likely will continue to buy up bonds as a safe-haven investment as stocks look for a market bottom.
The benchmark 10-year note rose 8/32 to 101-1/32, and its yield slipped to 3.63% from 3.66% late Monday. Bond prices and yields move in opposite directions.
The 2-year note was unchanged at to 100-19/32, and its yield held at 1.20%
The benchmark yield curve, the difference between the 2-year and the 10-year yield, narrowed to 2.42 percentage, down from a five-year high of 2.54 points set Friday. The yield curve is a key measure of investor sentiment, with a higher curve indicating a weaker economic environment.
The 30-year bond rose 10/32 to 105-16/32, and its yield fell to 4.18% from 4.20%.
The yield on the 3-month bill held even at 0.11%. The yield on the 3-month Treasury bill is closely watched as an immediate reading on investor confidence, with a lower yield indicating less optimism. Investors and money-market funds shuffle money into and out of the 3-month bill frequently as they assess risk in the rest of the marketplace.
Lending rates mostly unchanged
Borrowing costs were not much changed from the previous day, as the 3-month Libor rate fell to 2.22% from 2.24%, and the overnight Libor rate held steady at 0.4%, according to Bloomberg.com.
Libor, the London Interbank Offered Rate, is a daily average of interbank lending rates and a key barometer of liquidity in the credit market. More than $350 trillion in assets are tied to Libor.
Rates had risen for a few days after Treasury Secretary Henry Paulson said the government would no longer buy up banks' troubled assets. But the rise proved to be just a bump in the road, as rates resumed their decline following the Treasury Department's announcement of more banks receiving liquidity injections.
Treasury dispersed $33.56 billion to 21 banks in a second round of payments as part of the $700 billion bailout program designed to boost the nation's banking system. The new distribution brings the total to $158.56 billion and 30 banks so far.
As rates held steady, so too did two gauges of banks' confidence in the credit market.
The Libor-OIS spread held at 1.75. The spread measures the difference between actual borrowing costs and the expected targeted borrowing rate from the Fed. It is used as a gauge to determine how much cash is available for lending between banks. The bigger the spread, the less cash is available for lending.
Another indicator, the TED spread, fell slightly to 2.10 percentage points from 2.15 points. The TED spread measures the difference between the 3-month Libor and the 3-month Treasury bill, and is a key indicator of risk. The higher the spread, the less willing investors are to take risks. 
