NEW YORK (MarketWatch) — Treasury prices rose on Thursday, pushing yields down in a tight range, as European Union leaders began a two-day summit, though investors have very low expectations for progress on key steps needed to resolve the region’s debt and banking crisis.

Bonds held onto gains after the U.S. government’s sale of 7-year notes (7_YEAR) came at the lowest yield on record.

Yields on 10-year notes (10_YEAR) , which move inversely to prices, fell 5 basis points to 1.58%. A basis point is one one-hundredth of a percentage point.

Yields on 30-year bonds (5_YEAR)  declined 3 basis points to 2.66%.

Five-year yields (5_YEAR)  fell 6 basis points to 0.69%.

EU leaders are expected to focus on addressing the 2-1/2 year old euro-zone debt crisis, with programs to spur growth and work more on a regional bank union and bank supervisor most likely, analysts said. Read more on EU summit.

“Hopefully the market is getting past the point of expecting a grand bargain and can let them get to a solution,� said Tom Murphy, who heads up investment-grade corporate debt at RiverSource Investments, which oversees about $165 billion in fixed-income assets. “I don’t have any confidence the European situation gets much better, but I hope it doesn’t get much worse.�

They may discuss how the already-approved bailout programs — the European Stability Mechanism and European Financial Stability Fund — relate to private bond holders and how they can distribute aid, according to analysts at Credit Suisse.

But what’s pretty unlikely to see details on would be agreement to unify fiscal decision making, which Germany has demanded as a necessary precursor to any form of jointly-guaranteed debt instrument, often lumped together as euro bonds.

Bonds rose “as, get this, a disappointing outcome is expected from the EU summit,� quipped David Ader, head of government bond strategy at CRT Capital Group.

But still, yields have remained in a tight range in recent sessions, and could have trouble rising much as the continued problems in Europe support safe-haven demand for U.S. bonds. Read about Thursday’s bond action.

“The sideways price action is not hard to understand,� Ader wrote in a report. Based on investor positioning surveys, “the market clearly has moved to a very neutral view even as it has accepted/respected the litany of risks that favor support for Treasurys in the weeks and months to come.�

Also supporting bonds was an extension of the sell-off in U.S. equities after the Supreme Court upheld the Affordable Care Act of 2010. Read more on Supreme Court, healthcare.

Last auction of the week

The Treasury Department sold $29 billion in 7-year notes at 1.075%, though demand from a group of investors which includes domestic money managers was notably light. Read more on 7-year auction results.

The government already sold 2-year (2_YEAR)  and 5-year notes this week, receiving tepid demand.

Those auctions didn’t come at record low yields, which “is a sign of continued investor migration up the curve,� as shorter-term rates are expected to stay locked down by the Federal Reserve’s on-hold interest-rate policy, said strategists at Nomura Securities.

Treasury prices shrugged off data showed U.S. initial jobless claims fell 6,000 to 386,000 in the latest week, after the prior week’s number was revised up. A separate report showed the U.S. economy grew an unrevised 1.9% in the first quarter. Read about jobless claims.