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Treasurys slither lower
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August 15, 2000: 3:27 p.m. ET
Investors await data; dollar little changed versus yen, falls against euro
By Staff Writer Catherine Tymkiw
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NEW YORK (CNNfn) - U.S. treasurys meandered lower Tuesday after economic data about the pace of industrial production yielded no surprises and investors awaited the release of the Consumer Price Index on Wednesday.
In currencies, the dollar fell against the euro but was little changed versus the yen.
"We have been trading on the low side but, ahead of the CPI [Consumer Price Index] number tomorrow, bonds have already moved pretty sharply over the past couple of weeks," said Mike Ryan, senior bond analyst at PaineWebber. "The perception is that there's not a whole lot of upside and the CPI number isn't going to give the market much in the way of legs."
 Just before 3 p.m. ET, the price of the 10-year note fell 8/32 to 99-18/32. Its yield, which moves inversely to its price, was unchanged at 5.80 percent. The 30-year bond slid 13/32 to 107-17/32, its yield rising to 5.72 percent.
Investors were also keeping an eye on oil prices, which have raced higher amid fears of inventory shortfalls. Rising oil prices often weigh on inflationary concerns.
The price of Brent futures for September delivery rose $1.07, or 3.4 percent, to $32.55 per barrel, blasting through the previous 10-year peak of $31.95 set in March on the International Petroleum Exchange. Brent futures hit as high as $32.80 per barrel earlier in the day.
"The big move in oil happened over the last three days," said Ryan. "I think we all understand the rules with oil now. You're going to have issues about inventories being low and that will push prices up. Then Saudi Arabia will say $30 a barrel is not sustainable so we're back at this game."
Investors await trade data
With the next meeting of the Federal Open Market Committee -- the Federal Reserve's monetary policy-making body -- just one week away, investors are still watching economic indicators.
But the consensus is that the Fed will not raise interest rates at its Aug. 22 meeting. Interest rates have risen six times since June 1999.
"There's no smoking gun and there's no reason for them to go changing rate policy right now," said Ryan.
 Still, investors will be closely watching Friday's trade balance numbers, which are expected to show a $31.5 billion deficit.
"We're so dependent on foreign capital that, if you could see any weakness in the dollar it could come on Friday with the trade numbers. If we see a sharply above consensus reading for trade, there could be some concern about the sustainability of that trade gap and that could certainly weigh on the dollar," said Ryan.
Yen, little change versus dollar
The yen was little changed against the dollar as investors continued to digest the decision by the Bank of Japan (BOJ) to raise short-term interest rates by 0.25 percent last Friday. It was the first rate hike in a decade and ended the central bank's 18-month-old zero-interest-rate policy.
"This issue about the yen and the euro has been about what's happening with BOJ policy against weak Japanese policy. The fact that the euro continues to have a hard time finding its footing and the dollar has been the beneficiary of that," said Ryan.
 Around 3 p.m. ET, the euro rose to 91.29 cents from 90.55 cents Monday. The dollar was little changed versus the yen, slipping to 109.15 yen from 109.38 yen.
"Lighter-than-usual trading volumes, due to the Assumption Day holiday in Europe, facilitated the single currency's gains," wrote Alex Beuzelin, market analyst at Ruesch International. 
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