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Bonds continue climb
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March 31, 2000: 3:26 p.m. ET
Quarter-end buying boosts prices; yen soars against dollar, euro
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - Treasury bonds ended higher Friday, benefiting from quarter-end buying, or "window dressing," as portfolio managers snapped up government securities, which have posted strong gains recently.
"Portfolio managers wanted to show this type of investment (Treasurys) on their books," said Kevin Flanagan, economist at Morgan Stanley Dean Witter. "It seems they were the better returning investment vehicle in the first quarter."
Shortly after 3 p.m. ET, the 30-year Treasury bond rose 14/32 of a point to 105-22/32. Its yield, which moves inversely to its price, fell to 5.84 percent -- its lowest level since late August -- from 5.87 percent Thursday. Ten-year Treasury notes gained 5/32 to 103-14/32, their yield falling to 6.02 percent from 6.05 percent Thursday.
But limiting gains was an economic report that suggested continued strength in the economy. The March Chicago Purchasing Management index rose to 57.4 from 56.7 in February. The index measures manufacturing activity in the Chicago region.
A sharp increase in the prices paid component, which rose to 74.2 in March - its highest level since May 1995 - from 68.9 in February weighed on shorter-dated maturities, such as two-year notes, according to analysts. These issues are more sensitive to changes in monetary policy.
Although a reflection of higher oil prices, the component heightened fears of further tightening from the Federal Reserve. With the U.S. economy in a record period of expansion, the central bank already has hiked short-term interest rates five times since June, and it repeatedly has signaled it will continue to until it sees a slowdown.
But Curt Shambaugh, bond market strategist at Credit Suisse First Boston, told CNN's Before Hours Fed Chairman Alan Greenspan most likely will continue the tightening process in a gradual manner by a quarter-point.
(176.4K WAV) (176.4K AIFF)
Other data had little impact to the market. U.S. personal income rose 4 percent in February and consumer consumption gained 1 percent in the same month, according to the Commerce Department.
Looking ahead, two key March economic reports are scheduled next week, Monday's National Association of Purchasing Management index of manufacturing activity and Friday's employment report. Any signs of accelerating economic strength may jolt the market.
(Click here for a look at Briefing.com's economic calendar.)
Yen soars versus dollar, euro
In the currency markets, the yen rose sharply against the dollar and the euro, fueled by optimism the Japanese economy is on track toward economic recovery.
The Japanese currency set a three-month high against the dollar and record high against the euro.
Shortly after 3 p.m. ET, the dollar traded at 102.43 yen, down from 105.77 yen Thursday, a 3.2 percent gain in the yen's value. The euro traded at 95.57 cents, down from 96.19 cents Thursday.
Japan begins its new fiscal year Monday with the scheduled release of the Tankan Survey, a quarterly report of Japanese business sentiment from the Bank of Japan considered one of the most important indicators of the Japanese economy.
The survey is expected to show improved business sentiment and has contributed to the yen's strength. 
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