U.S. govt bonds close cautious session mixed ahead of Q1 labor productivity

NEW YORK (AFX) - U.S. government bond prices closed mixed, with investors refraining from activity ahead of tomorrow's release of first-quarter labor productivity data, dealers said.	    At 4.00 pm, the 30-year 5-3/8 pct bond was down 1/32 at 95-23/32 yielding 5.669 pct, the 10-year 5 pct note was up 2/32 at 98-16/32 yielding 5.192 pct, and the 4 pct 2-year increased 1/32 to 99-25/32 yielding 4.116 pct.	    The June bond future was down 8/32 at 102-3/32.	    Bond prices moved sideways throughout the session, with long-term treasuries losing ground on the possibility of an economic recovery process underway, traders said.	    Josh Stiles, senior bond strategist at IDEAGlobal said: "Treasuries are very sensitive to key U.S. economic data currently."	    Nonfarm productivity is forecast to rise 0.9 pct in the first quarter, after rising 2.2 pct in the fourth quarter of 2000, economists said. Unit labor costs will jump an "unsustainable" 4.2 pct in the first quarter of 2001, after a similar increase in the last quarter, they said.	    The market will also closely monitor Friday's release of April producer prices and retail sales for clues about the state of the economy, traders said.	    Stiles said last Friday's surprise decline in April nonfarm payrolls will likely prompt a 50 basis point cut in the key Fed funds rate when the Federal Open Market Committee meets at its regularly scheduled policy meeting on May 15.	    The Fed funds rate was at 4-1/2.

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