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Treasury prices climb, dollar splits
Bond prices rise ahead of auction as crude prices soothe inflation fears; dollar mixed.
November 7, 2005: 4:55 PM EST

NEW YORK (CNN/Money) - Treasury prices climbed Monday as lower crude prices helped ease inflation worries in a session lacking any major economic data.

The dollar split against the euro and the yen.

The benchmark 10-year note rose 9/32 to 97-1/32 to yield 4.63 percent, down from 4.66 percent in the previous session. The 30-year bond gained 19/32 to 108 to yield 4.82 percent, down from 4.85 percent late Friday. Bond prices and yields move in opposite directions.

In shorter-dated debt, the two-year note stayed relatively unchanged, yielding 4.46 percent. The five-year note added 3/32, yielding 4.54 percent.

Light, sweet crude oil for December delivery sank as low as $59 a barrel, before closing at $59.47 a barrel, $1.11 lower on the New York Mercantile Exchange.

The drop in the price of oil comes at a time when investors have expressed fear that high oil and gas prices will fuel inflation.

Bond investors fear inflation, since it erodes the value of fixed-income investments.

With no major economic reports delivered, investors remained focused on Tuesday's government-debt auction, which is part one of a $44 billion offering.

Besides Tuesday's $18 billion sale of three-year notes, the government also plans to sell an additional $13 billion worth of five-year Treasuries, and $13 billion in 10-year notes on Wednesday and Thursday of this week.

In currency trading, the dollar slipped from a 26-month high against the yen, buying ¥117.64, down from ¥118.28 late Friday. The euro bought $1.1808, down slightly from $1.1816 in the previous session.

-- from staff and wire reports

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