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The rally in U.S. Treasury bonds surprised many, taking 10-year yields to their lowest levels in 11 months. Jobs data and the European Central Bank meeting next week will determine whether bond prices have further to go.The bond market's rally is the result of a confluence of factors – falling yields in Europe, extra demand from pension funds, concerns among investors about long-term economic demand and technical factors, including short-covering from those who thought bond yields were headed higher.Prices have jumped, pushing the yield on benchmark 10-year U.S. Treasuries Thursday to 2.422 percent, the lowest since last June, despite the Fed easing back on its bond-buying stimulus program.Some bond fund managers were stung by a bet on lower five-year note yields and higher 10-year yields, a strategy used by many hedge funds heading into the year.
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