U.S. Treasuries drifted lower as sentiments about Argentina's financial situation improved and traders anxiously awaited tomorrow's testimony by

Federal Reserve Chairman

Alan Greenspan.

Lately, the two-year Treasury note dipped 1/32 to 99 21/32, yielding 4.659%. Yields fall when prices rise, and vice versa. The 10-year benchmark note slipped 2/32 to 98 20/32, moving the yield up to 5.182%, while the 30-year Treasury bond lost 1/32 to 97, yielding 5.582%.

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"The market's paying attention to the snapback in the emerging markets," said Hamilton Davis, director in government bond trading at First Union Securities. "There's been a bit of improvement in the Argentinean situation, improving

the outlook for the longer term." Perceptions about Argentina's financial crisis eased today after opposition party members said they would support a government fiscal austerity plan. Over the past few days, the bond market rose while concerns over Argentina's economy escalated and investors opted for U.S. Treasuries as a safer investment alternative.

Market watchers also said bond trading was light and very quiet ahead of Greenspan's testimony -- previously known as

Humphrey-Hawkins -- before Congress tomorrow. The speech will be the latest indication of the Fed's view of the economy, whose near-term recovery remains questionable.

"That's what people are anxious about," said Davis. " A lot of traders I speak to don't really feel like taking a big stab at the market until they have clear vision of what Greenspan thinks the world looks like."