Rising U.S. Treasury yields have pushed government bond exchange traded funds lower so far in February on hopes Greek will seal a second financial bailout and ease tensions over the Eurozone debt crisis.

A spike in yields would punish nervous investors who have piled into the perceived safety of Treasury ETFs, since yields and bond prices move in opposite directions. It could also unleash a tidal wave of cash into stocks as risk-averse investors finally get off the sidelines.

The iShares Barclays 20+ Year Treasury Bond (NYSEArca: TLT) is down about 3% over the past week on signs Greek leaders will reach a deal on austerity measures, which would clear the way for more financial aid from the so-called troika – the European Union, European Central Bank and International Monetary Fund.

Yields on the 30-year Treasury bond have moved up from a low of about 2.8% in December to roughly 3.2%, while stocks have rallied on improved risk appetite and hopes a Greek default won’t blow up the EU.

Treasury ETFs rallied sharply over the summer on the risk-off trade but have bounced in a range in recent months with investors looking for some kind of resolution to the European debt logjam. The long-term Treasury ETF gained 34% last year but has dropped below its 50-day exponential moving average. The 200-day average is significantly lower than current levels.

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