Jobless claims report does little to move the market, currency traders book profits.

April 7, 2005: 10:38 AM EDT

NEW YORK (CNN/Money) - Bond prices drifted and the dollar fell on profit taking Thursday as traders turned their focus to upcoming economic reports.

The benchmark 10-year note added 1/32 of a point to 96-21/32, yielding 4.42 percent, down from 4.43 late Wednesday, while the 30-year bond lost 3/32 of a point to 109-12/32 to yield 4.74 percent, down from late Wednesday's 4.73. Bond prices and yields move in opposite directions.
In shorter-dated debt, the five-year note edged up 1/32 of a point to yield 4.07 percent, while the two-year also added one tick to yield 3.68 percent.
The Labor Department reported that initial claims for jobless benefits fell to 334,000 from a revised 353,000 the week before, nearly matching forecasts from economists surveyed by Briefing.com for claims to fall back to 330,000 last week.
But the data was not soft enough to spark a bond rally, and some analysts said the dip suggested the previous week's jump in claims was just statistical noise in a volatile read on the economy.
"There has been some modest deterioration in labor market conditions since early February," Alan Ruskin, research director at 4CAST, told Reuters. "The data is mildly bond friendly, but proximity to the key 4.39 to 4.41 percent zone on the 10-year has made bond traders loath to buy without something more substantive to hand," he added.
Treasury prices have generally traded higher since last Tuesday, in the wake of a bearish market weighed down by inflation fears that sent the yield on the 10-year note to an eight- month high at 4.64 percent last Monday.
Bond traders loathe high inflation, which generally erodes the value of fixed-income investments.
But no recent news or economic reads have allowed the 10-year yield to break through a major chart barrier at 4.42 percent, which was the trading high the benchmark note flirted with before the Federal Reserve's most recent interest rate hike. In currency trading, the dollar fell against the euro and the yen as investors took profits on the greenback's recent runup.
The euro bought $1.2921, up from $1.2866 late Wednesday, while the dollar bought ¥108.28, down from ¥108.65 in the previous session.
"We had a pretty good rebound in the dollar, but there is no strong catalyst to move the dollar higher and we are moving back into neutral," Steven Saywell, chief currency strategist at
Citigroup, told Reuters.
Trading was quiet as only wholesale inventories and consumer credit were scheduled to follow the weekly jobless claims report, and the markets hoped that one of the Federal Reserve
officials scheduled to speak later in the day would say something market-moving.

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