Markets & Stocks
Bond prices little changed
November 2, 1999: 9:16 a.m. ET

Treasury yields linger near 4-week highs; traders await Greenspan remarks
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NEW YORK (CNNfn) - Treasury bonds were little changed Tuesday, with yields hovering near four-week lows, as traders awaited direction from a morning speech by Federal Reserve Chairman Alan Greenspan.
     Just before 9:10 a.m., ET, the price of the benchmark 30-year Treasury bond was unchanged at 97-7/32. Its yield, which moves inversely to the price, held steady at 6.18 percent, near a four-week low.
     Bonds Tuesday showed no reaction to news from the Commerce Department that Americans' personal income in September was flat while spending rose 0.4 percent. This brought the saving rate to positive 1.6 percent.
     "It does show consumers are in a buying mood," said Gary Thayer, chief economist at A.G. Edwards. Still, the department said the unchanged income figure was partially due to disruptions from September's Hurricane Floyd.
     Thayer said the report's uptick in spending, however, signals neither a worrisome rise in inflation nor an overheating economy.
     "We think the economy is poised to slow down and that's good news for the Federal Reserve," Thayer said.
     Ahead Tuesday, traders may get some insight into the Fed's thinking on interest rate direction when Greenspan address a banker's convention via satellite at 9:15 a.m., ET.
     In an e-mail to clients, Donaldson Lufkin & Jenrette said there's a possibility of Greenspan making comments on monetary policy, given the nature of his audience. The fed chief speaks to America's Community Bankers annual convention in Orlando, Fla.
     The Federal Reserve last summer twice raised interest rates in a bid to pre-empt inflation and cool an overheating economy.
Dollar stronger

     The dollar move higher against the major currencies Tuesday. Just before 9:10 a.m. ET, the dollar rose to 104.85 yen from 104.08 Monday, a 0.73 percent gain the U.S. currency's value.
     The dollar, which fell as low as 103.94 yen overnight, gained, analysts said, as traders sold the Japanese currency to invest in overseas markets.
     The yen's recent strength has caused investors to leave Japanese stock markets as a buoyant yen makes it tougher for Japan's exporters to compete. In the country's equity markets, Japanese stocks ended Tuesday's session flat.
     In an e-mail to clients, Donaldson, Lufkin & Jenrette said the yen also suffered on a rumor that Japan's economic stimulus package will be smaller than expected.
     The dollar rose slightly against the euro. It cost $1.0503 to buy on euro, down from $1.0517 Monday, a 0.12 percent gain in the U.S. currency's value. Back to top


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