Bonds tick higher on weak housing news

NEW YORK (CNNMoney.com) -- Treasury prices ended slightly higher Monday as weaker-than-expected reading on U.S. pending home sales in October outweighed earlier hawkish comments delivered by a Federal Reserve official.

The dollar eased slightly against both the euro and the yen after hitting a 20-month low against the euro Friday.

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The benchmark 10-year note rose 2/32, or 63 cents on a $1,000 note, to yield, 4.42 percent, down from 4.43 percent late Friday.

The 30-year note added 3/32, or 94 cents on a $1,000 note, to yield 4.54 percent, down from 4.56 percent in the previous session. Bond prices and yields move in opposite directions.

The five-year note rose one tick to yield 4.38 percent, while the two-year was unchanged, yielding 4.51 percent.

Treasury prices were little changed for most of the session, but ticked higher after the National Association of Realtors reported that Pending Home Sales Index of existing U.S. homes fell 1.7 percent in October to 107.2 from 109.1 in September. Analysts polled by Reuters anticipated the index to 108.6.

"I am sure it is helping support the market, but it didn't really give it that initial push people were expecting," Adam Brown, co-head of U.S. Treasury trading at Barclays Capital, said about the homes data.

Bond prices were under pressure earlier Monday after Chicago Fed President Michael Moskow said that the central bank needs to remain "very vigilant" over inflation even though core inflation has eased.

In a televised interview, the Chicago Fed chief Moskow downplayed recent reports that suggested the economy is experiencing a slowdown.

But investors have plenty of economic data to look forward to later this week. Preliminary productivity figures, factory orders and ISM services reports will be released Tuesday, but most investors are focused on the November employment report due out Friday.

The dollar, which has been under pressure as a run of weak U.S. data has boosted expectations the Federal Reserve might cut interest rates next year, fell against the euro and the yen.

The euro bought $1.3341, up from $1.3312 in the previous session. The dollar bought ¥115.30 down slightly from ¥115.34 Friday.

---from staff and wire reports

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