Treasuries rose on Thursday as concerns over the credit and housing markets sent investors to the protection of safe-haven investments, including government bonds.

Investors increased bids on treasuries after the largest U.S. bank and fourth largest mortgage lender, Citigroup, Inc, said today that it would said it would cut is residential mortgage and home equity holdings by around $45 billion, or 20 percent, in the coming year.

In other news, bonds fell slightly after rumors that the U.S. Treasury would provide backing for mortgage agency securities. The treasury rejected the speculation as untrue.

Swiss bank UBS fell to a five-year loan after analysts increased their markdown forecasts of mortgage-backed securities.

Two year treasuries rose 7/32 in price, yielding 1.53 percent at 5:22 p.m. in New York compared with 1.64 late Wednesday. Ten year treasuries rose 24/32 in price to yield 3.592.