Europe's debt crisis and the ensuing demand for safety has pushed Treasuries up 9.7 percent this year as of yesterday, set for the biggest annual gain since 2008, according to Bank of America Merrill Lynch data. German bunds returned 7 percent and Japanese bonds advanced 2 percent, the indexes show.

The difference between the yields on two- and 10-year Treasury notes was 168 basis points. It narrowed to 161 basis points on Nov. 23, the least since Oct. 6 even as the Federal Reserve and the Treasury this week sold $116 billion in notes.

The $35 billion two-year note auction on Nov. 21 produced the highest bid-to-cover ratio on record for a fixed-coupon Treasury note or bond, 4.07, while a $35 billion five-year debt sale the next day was priced at a record low yield for the securities of 0.937 percent. A $29 billion seven-year auction on Nov. 23 garnered a record low yield of 1.415 percent.

The Fed on Nov. 21 sold $8.531 billion of securities maturing in February 2012 through July 2012 as part of its plan to lower borrowing costs that's become known as Operation Twist, according to the Fed Bank of New York's website. The central bank also sold $8.63 billion in Treasuries maturing from March 2014 to November 2014, in a second operation that day.

Eoin Treacy's view US 10-year Treasury yields have steadied in the region of the 2009 lows around 2%. The oversold condition relative to the 200-day MA has been at least partially unwound. A sustained move above 2.5% would indicate supply is returning to dominance beyond the short term.

In an environment where a premium has been put on liquidity and the Dollar has surged, US 10-year Treasury prices have not rallied as powerfully as on past occasions. Prices have been mostly rangebound since August and a sustained move above 132 would be required to reassert the uptrend.