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Data help bonds circle higher
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April 2, 1999: 12:31 p.m. ET
Treasury traders rejoice after report shows job market growth is slowing
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NEW YORK (CNNfn) - Those few traders left in the bond market cheered Friday to hear the sound of the job market losing steam, pushing Treasury prices up more than a full point in thin trading volume.
By the bond market's early close at noon ET, the benchmark 30-year Treasury bond had climbed 1-3/32 of a point in price to 95-1/32, sending the yield tumbling to 5.59 percent.
Bonds have taken a roller coaster course this week, climbing in relief after the Federal Reserve kept interest rates unchanged, only to plunge again on discouraging signs of a revived manufacturing sector. After all the reversals, the long bond stands unchanged in yield and up a scant 1/32 of a point in price.
According to the Labor Department Friday, non-farm payrolls increased by only 46,000 new jobs in March, marking both its weakest expansion in more than three years and a dramatic slowdown from February's mammoth jump of 297,000.
Economists had expected a higher figure, leading bond traders to rejoice at the sign the labor market may finally be curbing its rapid expansion. Investors have watched warily in recent months as the growing number of available positions fed concerns that employers will be forced to offer higher salaries to compete for workers.
This condition of rising wages would in turn pave the way for broader inflationary pressures in the economy, depressing demand for bonds by lowering the return offered on investment in real terms.
However, the Labor Department delivered a firm check to these fears, saying that wages are climbing less quickly than the market had expected, inching up 0.2 percent in March to an average of $13.09 per hour. Investors had steeled themselves for a 0.3-percent increase, adding a welcome edge to the morning's relief buying.
Activity remained thin throughout the truncated day, with many key players absent as they took advantage of closures in most other financial markets, starting their weekend early.
Currencies sluggish
Activity was even more glacial in currency markets, which ground almost to a standstill in line with the holiday closure of British exchanges and U.S. futures trading.
Even the few speculators remaining in the market were reluctant to risk any unpleasant weekend developments in the Balkans, particularly in the wake of growing calls for NATO to deploy ground forces against Yugoslavia.
The dollar slipped to 120.53 yen from its previous close of 120.87 as investors holding yen after the annual repatriation of Japanese capital opted to hang on to their positions, at least until Monday's release of the quarterly "tankan" business confidence survey.
Many economists now expect the tankan to show its first increase in two years, giving yen bulls hope that the beleaguered Japanese economy has finally gone back on the upswing.
The dollar, like the bond market, has suffered a wide range of twists and turns this week, falling steadily ahead of Thursday's Japanese fiscal new year only to rebound again as local investors returned their attentions to overseas securities.
The euro crept lower to $1.0785 in particularly slow trading, with nearly all major European commercial centers closed for the Good Friday holiday. 
-- by staff writer Robert Scott Martin
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