Bloomberg reports that, just as Dow 11,000 seems inevitable today, so too does a four percent yield on the government’s benchmark ten-year note, all of which should make this week’s heavy load of new debt issuance by the Treasury Department much more interesting.

Treasury 10-year note yields approached 4 percent for the first time since June as reports on U.S. service industries and pending home sales added to signs the U.S. economic recovery is gaining traction.

Ten-year yields rose for a third day as the Institute for Supply Management’s gauge of non-manufacturing businesses expanded in March at the fastest pace in almost four years and pending home sales last month gained the most since October 2001.

The 10-year note yield rose 5 basis points, or 0.05 percentage point, to 3.99 percent at 10:48 a.m. in New York. That’s the highest level since June 11.

The on again – off again home buyer tax credit will undoubtedly produce another surge in homebuying this spring as it did last fall and this is already showing up in the February data. Interestingly, after monthly home sales plummeted last fall when the first round of tax credits was about to expire, this makes for even better headlines for the month-to-month increases, all of which will no doubt delude many homebuyers into thinking that the housing market really has hit bottom.

As for the Treasury Department, they’ll be selling a whopping $165 billion in debt this week including some $82 billion in long-dated issues – $40 billion 3-year notes, $21 billion in 10-year notes, $13 billion in 30-year bonds, and $8 billion in 10-year TIPS. This has become almost a routine, every-other-week affair that could see its first big headwind in the days ahead if yields keep rising.