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Bonds buy into economic data
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March 11, 1999: 9:16 a.m. ET
Softening labor market encourages yields lower, while dollar makes headway
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NEW YORK (CNNfn) - Treasury traders spent another morning Thursday waiting by the telephone for economic reports to call, rousing themselves to buy once the data started to trickle in.
After drifting lower throughout the morning, the benchmark 30-year Treasury bond climbed 5/32 of a point in price to 95-22/32 by 9:00 a.m. ET, sending the yield down to 5.55 percent.
The long bond's upturn was in response to an encouraging jobless claims report that showed U.S. unemployment levels inching up to 289,000 from a revised figure of 288,000 in the week before.
Although economists had forecast a more impressive unemployment figure of 292,000, bond traders still rallied to the sign that the ominously tight labor market may be letting off some steam.
In particular, jobless claims -- the number of U.S. workers seeking unemployment compensation -- have dropped to 10-year lows in recent weeks, fueling fears that wages could inflate in response.
Retail also welcome
Bonds also got a boost from an on-target February retail sales report, taking comfort in particular from a slight downward revision in the January sales figure to 0.1 percent from a preliminary figure of 0.2 percent.
Investors had speculated that the Commerce Department would revise the January figure up, and so the lower benchmark proved a welcome surprise.
With the morning spate of data out of the way, the Treasury market seems set to follow its momentum and drift weakly upward, although an expected Wall Street rally could drain buyers out of bonds and into stocks.
Some traders already were retreating to the sidelines ahead of Friday's producer price index, the last major economic release of the week. Although the market remains confident that the data will show continuing mild inflation, rising oil prices are likely to make any surprises here unpleasant ones.
Dollar bulls catch their breath
The dollar, meanwhile, recaptured its balance against other global currencies after Japanese financial authorities indicated their desire for a strong U.S. currency.
In an interview with Reuters, Minister of Economic Planning Taichi Sakaiya said that the dollar's current value is not bad for Japan's economy, leading the greenback up to 120.43 from its previous closing level just below 120.
Resurgent confidence in the Japanese economy had led the dollar to fall in recent days.
The euro also fell back before the U.S. currency's newfound strength, sliding to $1.0873 from its previous close of $1.094. 
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