NEW YORK (CNN/Money) - Treasury prices moved mostly higher Monday on trader speculation the Federal Reserve will cut interest rates before year's end and as investors shifted funds out of long bonds in anticipation of corporate bond sales.

Around 4:00 p.m. ET, two-year notes gained 5/32 of a point to 100-14/32, yielding 1.90 percent. The five-year note rose 7/32 of a point to 101-7/32, yielding 2.98 percent, down from 3.03 percent Friday.

The benchmark 10-year note rose 3/32 of a point to 102-10/32 to yield 4.08 percent, down from 4.10 percent late Friday. Going against the overall grain, the 30-year bond slipped 8/32 of a point to 104-1/32 to yield 5.10 percent.

In an article over the weekend citing conversations with Fed officials, the Washington Post said the central bank was worried a sluggish U.S. economy would be vulnerable to a shock such as a war in Iraq and was, therefore, likely to cut rates in the next few months.

The Wall Street Journal followed suit on Monday with an analysis, prompting traders to snap up two-year Treasury notes while Eurodollar contracts rose to a three-week high on the Chicago Mercantile Exchange.

The reports came as a surprise to markets that had been hearing Fed officials proclaim their undying optimism about the economy's resilience over the past several weeks and clear signals they were reluctant to lower the funds rate.

"I had thought the Fed would wait until December before easing, but now it looks like if the data this week is really bad, we could see a move sooner," said John Spinello, Treasury strategist at Merrill Lynch Government Securities.

There were no U.S. economic reports on Monday's calendar.

Traders were looking ahead to data on October consumer confidence expected on Tuesday, and more importantly, data on manufacturing and unemployment due later in the week. All the reports are expected to be weak.

Meanwhile, retailers and consumer companies sold $1.4 billion of 30-year bonds, which traders said drew some investors away from long-dated government paper. All of the investment-grade bonds on the forward calendar are also in 30-year maturities.

In the currency market, the dollar weakened against the euro and the yen.

Around 4:00 p.m. ET, the euro bought 98.45 U.S. cents, up from 97.60 cents late Thursday. The dollar bought ¥123.55, down from ¥124.31 Friday.  

--from staff and wire reports