CNN/Money One for credit card only hard offer form at $9.95 One for risk-free form at $14.95 w/ $9.95 upsell  
Markets & Stocks > Bonds & Rates
graphic
Bonds extend slide ahead of Fed
Dollar mixed, Treasuries fall in days before Wednesday's interest rate decision, 10-year debt sale.
November 8, 2004: 4:24 PM EST

NEW YORK (CNN/Money) - Bonds fell further Monday, still reeling from last week's strong jobs report as traders feared the employment data guaranteed the Federal Reserve will raise interest rates when it meets in two days, and again when it meets in December.

The dollar gained on the euro and slipped against the yen after hitting record lows in overnight trade.

In the bond market, the benchmark 10-year note dropped 11/32 of a point to 100-8/32 to yield 4.22 percent, up from 4.18 percent late Friday. The 30-year bond shed 17/32 of a point to 106-15/32 to yield 4.93 percent, up from 4.90 percent Friday.

The two-year note dipped 2/32 to yield 99-13/32, or 2.81 percent, up from 2.78 percent late Friday, while the five-year bond slipped 7/32 to 99-11/32, yielding 3.52 percent, up from 3.48 percent. Bond prices and yields move in opposite directions.

The Federal Reserve meets Wednesday and is widely expected to hike its federal funds rate by 0.25 of a percentage point to 2.00 percent.

According to Reuters, interest rates futures now show a better than 80 percent chance of a hike in December and have gone some way to pricing in a further rate rise for February, thanks to strong payroll figures last week.

October's jobs report showed employers adding 337,000 jobs to their payrolls, almost double analysts' predictions. Such strong numbers have fueled fears of inflation and some analysts have predicted the Fed will not only raise interest rates Wednesday but in December and February as well.

Bond traders dislike inflation because it erodes the value of the fixed-interest paying investments.

YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.

Interest rate concerns overshadowed Monday's surprisingly strong auction of $22 billion in three-year notes. The new debt went at a high yield of 3.090 percent and drew bids for 2.24 times the amount on offer, well above August's 2.02 level and the average of 2.12 for the year.

"The three-year was a great auction...but it just doesn't matter that much to the market," Andrew Brenner, head of fixed-income at Investec U.S., told Reuters. "The next key piece of information really is how the Fed phrases the statement (on the U.S. economy, which it habitually makes after policy meetings)."

Analysts say that, at the very least, the strong three-year debt sale suggested that the market will not have much trouble absorbing the

remainder of the week's $51 billion Treasury refunding.

The Fed announcement is due just an hour after the $51 billion, 10-year note auction closes. Investors will face buying a lot of fixed-interest paying bonds without knowing what the central bank might say in its post-meeting statement.

In the currency market, the euro bought $1.2912, down from $1.2966 late Friday. Although the dollar gained some ground early Monday, it reached an all-time low in overnight trading of $1.2985.

The dollar bought ¥105.53, down from ¥105.61 Friday.  Top of page




  More on MARKETS
Why it's time for investors to go on defense
Premarket: 7 things to know before the bell
Barnes & Noble stock soars 20% as it explores a sale
  TODAY'S TOP STORIES
7 things to know before the bell
SoftBank and Toyota want driverless cars to change the world
Aston Martin falls 5% in its London IPO




graphic graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.