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Bonds regain momentum
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September 13, 2000: 3:43 p.m. ET
Oil price retreat supports market ahead of key economic data; euro steady
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - Treasury bonds ended higher Wednesday for the first time this week, posting modest gains ahead of key reports on inflation and consumer spending.
In the currency markets, the euro stabilized against the dollar.
Shortly before 3 p.m. ET, the benchmark 10-year Treasury note rose 10/32 of a point in price to 100-4/32. The yield fell to 5.73 percent from 5.78 percent Tuesday. Yields move inversely to the price.
The 30-year bond gained 7/32 to 107-9/32, its yield retreating to 5.73  percent from 5.75 percent.
With little in the way of significant economic news, the market drew support from other factors, such as a further decline in oil prices. In late trading, U.S. light sweet crude futures dropped 87 cents to $32.50 a barrel on the New York Mercantile Exchange.
High oil prices raise the prospect of inflation, which is negative for bonds.
Although the corporate and agency bond calendar remains heavy, analysts said the lifting of hedges associated with the pricing of these deals also helped Treasurys.
Corporate bond issuers often lock in interest rates ahead of a launch by  selling Treasurys as a hedge against a possible decline in prices or a rise in interest rate yields. This is known as rate lock selling.
One example, a $4.5 billion debt sale from Fannie Mae was priced early in the day.
But some market participants opted for the sidelines ahead of key reports. August producer price and retail sales data are slated for release Thursday and consumer prices Friday.
A speech by Federal Reserve Chairman Alan Greenspan had no apparent market effect. Greenspan, who addressed the National Association for Business Economics annual meeting in Chicago, did not refer to monetary policy.
Investors also shrugged off the latest economic news. The Labor Department reported U.S. import prices rose 0.2 percent in August, while export prices fell 0.3 percent.
In a separate report, the U.S. current account deficit widened to a record
$106.1 billion in the second quarter from a revised $101.5 billion in the first quarter, according to the Commerce Department.
Euro holds steady
The euro stabilized against the dollar Wednesday, trading around 86.50 cents throughout most of the day as speculation of possible central bank intervention to lift the currency continued.
The battered euro briefly rose above 87 cents after a German magazine  reported that the French government pushed the idea of intervention at last week's Ecofin meeting of European finance ministers. However, the French Ministry of Finance denied the report.
"Once again, it shows a lack of follow through after thoughts of intervention," said Tom Benfer, currency analyst at Bank of Montreal.
The euro set a new lifetime low of 85.50 cents Tuesday, its fourth record low in a week.
Shortly before 3 p.m. ET, the euro traded at 86.11 cents, down from 86.36 cents Tuesday, a 0.3 percent gain in the dollar's value. The dollar was buying 107.15 yen compared with 106.84 yen Tuesday. 
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