Fed futures still show rate hike by early 2012 ( SPX DJIA COMP GLD UST10Y UST2YR UST7YR TNX TYX TLT TBT BND AGG TIP UST5YR UST30Y FXE FXY UUP UDN USDYEN EURUSD DXY ) (by Deborah Levine)

NEW YORK (MarketWatch) -- Traders in interest-rate futures held onto bets that the Federal Reserve is most likely to begin meaningfully raising its target rate early next year after Friday's Labor Department payrolls report showed the U.S. economy added more jobs than expected in March. The February fed funds contract priced at 99.51 on Friday, down from 99.53 before the data and 99.59 Thursday. The price of the contract, subtracted from 100, indicates the expected fed funds rate for the month of the contract. So the February contract is pricing in a fed funds rate of 0.49 percentage point, indicating a good chance that officials will raise the target rate to 0.50% from its current target range of zero to 0.25%. The Fed typically moves its target rate in quarter-percentage point increments, while fed funds futures settle at the average price for the month in which they mature.