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Bonds end week a touch lower
Treasuries show little reaction to jump in employment, comments by Fed officials; dollar mixed.
December 2, 2005: 4:10 PM EST
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NEW YORK (CNNMoney.com) - Bond prices ended the week slightly lower as investors largely ignored strong U.S. employment data and statements by Federal Reserve officials on Friday, expecting the central bank to continue raising interest rates.

The dollar rose against the euro and was relatively unchanged against the yen.

The benchmark 10-year note slipped one tick to 99-26/32 to yield 4.52 percent, up slightly from 4.51 late Thursday. The 30-year bond fell 1/32 of a point to 109-18/32 to yield 4.72 percent, up from 4.71 in the previous session. Bond prices and yields move in opposite directions.

In shorter-dated debt, the two-year note was little changed, yielding 4.43 percent, and the five-year note also was relatively unchanged, yielding 4.45 percent.

Treasury prices dipped after the Department of Labor said the economy added 215,000 jobs in November, slightly above the gain of 210,000 jobs forecast by economists surveyed by Briefing.com.

"The numbers in of themselves are sort of a push-and-pull. And the market, based on that, isn't doing a whole lot," Kevin Flanagan, fixed income strategist at Morgan Stanley in White Plains, New York told Reuters.

The slightly better-than-expected reading on the job market is the latest in a string of economic reports that have indicated robust growth and fanned inflation fears in the bond market.

On Thursday, the government said the pace of manufacturing remained strong in November, and construction spending in October exceeded forecasts.

Investors paid little attention to later comments by departing Federal Reserve chief Alan Greenspan and San Francisco Fed President Janet Yellen.

Speaking to a Federal Reserve Bank of Philadelphia conference, Greenspan said the economy displayed good short-term prospects but warned that the federal budget deficit poses "significant" economic risks.

Yellen echoed expectations about the Fed's monetary tightening campaign, noting that interest rate hikes were likely to continue, while stressing the need to monitor price gains.

While next week brings another round of economic data including October factory orders and third quarter productivity, investors are focused on the Fed's next policy meeting scheduled for Dec. 13, with most analysts believing that the central bank will implement another quarter-point rate hike, bringing short-term interest rates to 4.25 percent.

In currency trading, the dollar gained versus the euro and held steady against the yen, after the Japanese currency traded at a 32-month low against the dollar.

The euro bought $1.1717, down from $1.1733 late Thursday. The dollar bought ¥120.47, relatively unchanged from the previous session.

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