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Bonds up; dollar mixed
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October 22, 1999: 9:12 a.m. ET
Analysts expect little market activity until next week's GDP, ECI
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NEW YORK (CNNfn) - Treasury bond prices edged higher Friday for only the second time this week, while the dollar was mixed against the major currencies.
But with an absence of economic news, analysts expect a quiet, range-bound trading session ahead.
"I would suspect we'll go out with a whimper," said Michael Boss, bond futures broker at IBJ Lanston Futures.
Just before 9 a.m., ET, the price of the 30-year Treasury bond rose 6/32 to 97-4/32. Its yield, which moves inversely to the price, fell to 6.33 percent from 6.35 percent Thursday.
Bonds have lost value or been flat nearly every day since Oct. 5, when the Federal Reserve left its main lending rate unchanged at 5.25 percent but signaled concern about rising inflation.
And few expect much upside until the market gets past the Fed's next meeting on Nov. 16. Analysts say yields, already at two-year highs, should stay higher as long as economic data continue to show strength.
That trend may continue next week with the release of two key economic indicators: the first reading on third-quarter gross domestic product and the third quarter's employment cost index.
"That's going to be our next hurdle," IBJ Lanston's Boss said.
In an e-mail to clients Friday, Donaldson Lufkin & Jenrette agreed.
"Our GDP estimates (of 5.2 percent growth) have negative connotations for the market," the firm said. "Our total ECI estimate (of 0.8 percent growth) is neutral for the market, though the wage component estimate ( up 0.9 percent) is probably a negative."
DLJ noted that ECI, because it's viewed as forward-looking, tends to have more market impact than GDP, which is historical.
"In addition, the focus on ECI reflects the widely held perception that it is one of Fed Chairman (Alan) Greenspan's favorite indicators," DLJ said.
With unemployment at a 29-year low, Greenspan has cautioned that rising wages could bring on increased inflation. The Fed, the nation's central bank, twice raised interest rates over the summer in a bid to pre-empt inflation and slow economic growth.
Dollar mixed
The dollar Friday fell against the yen but rose versus the euro.
Just before 9 a.m. ET, the dollar slipped to 105.64 yen from 106.08 Thursday, a 0.42 percent drop in the dollar's value.
The yen strengthened after a government report said Japanese business activity picked up in August.
It cost $1.0748 to buy one euro from $1.0797 Thursday, a 0.47 percent rise in the dollar's value.
Still, most analysts expect the euro to move higher as the region shows signs of economic recovery. 
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