NEW YORK (CNN/Money) - Data showing tame inflation and weak industrial production could not stem the ongoing losses in the Treasury market Friday as bonds capped a miserable week.
At 3 p.m. ET, the benchmark 10-year note fell 28/32 to 100-22/32, yielding 4.90 percent, up from 4.75 percent at Thursday's close. The 30-year bond lost 27/32 at 101-3/32, yielding 5.28 percent, up from 5.21 percent at Thursday's close.
Five-year notes shed 15/32 to 96-24/32, yielding 4.22 percent.
The fresh losses came despite news from the government that its main inflation benchmark, the Consumer Price Index, fell 0.3 percent in October, led by the sharpest drop in energy prices since March 1986. Core CPI, which excludes volatile food and energy prices, rose 0.2 percent.
"It's still the same story, that there really is no inflation problem at this stage of the cycle," said Bill Cheney, an economist at John Hancock Financial Services in Boston.
Bond holders like limited inflation for its effect on preserving the value of their fixed-income payments.
Furthermore, the Federal Reserve said industrial production fell for the 13th straight month in October, the longest string of declines since 1932. Weak data often lifts bonds as investors worried about economic growth bail out of stocks.
But the Treasury market, which has rallied for 18 months, faces hurdles. Growing optimism about a U.S. economic recovery has forced bond investors to scale back expectations that the Fed will keep cutting rates and that Treasury rates will continue to fall.
Uncertainty has also waned with the military successes of U.S.-led forces in Afghanistan, whetting investors' appetite for risk and weighing down ultra safe Treasuries.
In the currency market, the dollar was mixed. The euro rose to 88.42 cents, up from 88.19 cents at Thursday's close. The dollar purchased ¥122.88, up from ¥122.35.
-from staff and wire reports 
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