|
Bonds slip amid rate jitters
|
 |
July 31, 2000: 3:04 p.m. ET
Investors cautious ahead of key economic news; dollar drops vs. euro, yen
By Staff Writer Jill Bebar
|
NEW YORK (CNNfn) - Treasury bonds ended slightly lower Monday, as investors remained jittery that the Federal Reserve might raise interest rates in the near term.
In the currency markets, the dollar fell against both the euro and the yen.
Shortly before 3 p.m. ET, the 10-year Treasury note dipped 1/32 of a point in price to 103-9/32. The yield, which moves inversely to price, was unchanged from its 6.04 percent level late Friday.
The 30-year bond fell 5/32 to 106-14/32, its yield rising to 5.79 percent from  5.77 percent.
Treasurys traded in a narrow range throughout the session as investors await two key economic reports for an indication as to where interest rates are headed.
Analysts said Tuesday's National Association of Purchasing Management (NAPM) survey and Friday's employment data, both for July, could hurt bonds if they show the economy is gaining momentum.
"We've got some important numbers," said Don Kowalchik, debt strategist at A.G. Edwards. "It might take a real surprise number to break out of this range."
Last Friday's stronger-than-expected gross domestic product (GDP) report renewed concerns about higher interest rates. GDP, the broadest measure of goods and services produced, grew by a 5.2 percent annual rate in the second quarter, the Commerce Department said. The figure compared to consensus estimates of a 3.7 percent annual rate gain.
The federal funds contract, a gauge of where Fed policy is headed, is now suggesting about a 42 percent chance of a rate hike when officials meet on Aug. 22.
Since June 1999, the central bank has hiked rates six times in an effort to cool the economy. Last month, it left rates unchanged.
The latest economic news had little impact. The Chicago Purchasing Managers' Index, a measure of manufacturing activity in the region, fell to 52 in July from 56.8 in the prior month.
Action from the Fed was also largely discounted. The central bank purchased securities maturing between Aug. 15, 2005 to May 15, 2016 in a process known as a coupon pass. Coupon passes often support Treasury prices by reducing supply.
(Click here for a look at Briefing.com's economic calendar.)
Dollar dips vs. euro, yen
The dollar fell against the major currencies Monday. Activity in the foreign exchange market was also quiet as traders await the NAPM and jobs data.
Along with the data, Craig Puffenberger, head of global foreign exchange trading at Credit Suisse First Boston, said this week's European Central Bank and  Bank of England policy meetings should garner attention. Analysts said it is unlikely either central bank will change rates. Decisions for both are expected Thursday.
Shortly before 3 p.m. ET, the euro traded at 92.74 cents, up from 92.39 cents Friday, a 0.4 percent loss in the dollar's value. The dollar was at 109.36 yen, down from 109.53 yen Friday. 
|
|
|
|
|
 |
|
