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Bonds bruised by Rubin
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May 12, 1999: 10:26 a.m. ET
Long-dreaded resignation knocks long bond deeper into the red, sinks the dollar
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NEW YORK (CNNfn) - Bonds slumped Wednesday as a wave of dread swept U.S. financial markets following the resignation of Treasury Secretary Robert Rubin.
Shortly after administration sources confirmed rumors Wednesday morning that Rubin was stepping down, the benchmark 30-year Treasury bond fell 14/32 of a point in price before correcting slightly, trading down 10/32 at 91-14/32 shortly after 10 a.m. ET. The yield climbed to 5.85 percent, near its 12-month high.
Speculation that Rubin was growing tired of his office had circulated in financial markets for months, leaving many traders braced for the news. Still, the confirmation came as a shock to the already-gloomy market, which has come to rely on Rubin's policy of strong support for the dollar.
The dollar also felt Rubin's absence, abandoning its early strength against the yen to trade at 120.68 yen shortly after the announcement. The euro, on the defensive after turmoil in Russia's highest government circles unnerved European traders, edged off its lows to trade at $1.0688.
In a press release, the White House said Rubin's protégé Lawrence Summers will replace him.
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