July 15, 2004

NEW YORK (Reuters) - U.S. Treasury prices moved slightly Thursday after inflation figures came in lower than expected, while jobless claims came in higher than estimates.

The benchmark 10-year note fell 3/32 to 101-31/32 to yield 4.49 percent, up from 4.48 percent Wednesday, and the 30-year bond shed 1/16 of a point to 102-3/32 to yield 5.22 percent, unchanged from late Wednesday.

The two-year note dropped 1/16 of a point to 100-7/32 to yield 2.62 percent and the five-year note dipped 3/32 to 99-21/32 to yield 3.69 percent.

The Labor Department said its producer price index (PPI), a measure of wholesale prices, fell 0.3 percent after rising 0.8 percent in May. The so-called core PPI, which excludes often volatile food and energy prices, rose 0.2 percent after rising 0.3 percent in May.

Economists, on average, expected PPI to rise 0.2 percent and core PPI to rise 0.2 percent, according to Briefing.com

Meanwhile, jobless claims jumped by 40,000 to 349,000, but expected seasonal shut downs at auto plants played a large role in that increase.

In the currency market, the dollar inched higher against the euro and the yen. The euro bought $1.2361, down from $1.2392 late Wednesday, and the dollar bought ¥109.28, up from late Wednesday's ¥109.15.

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