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Bonds fall, dollar splits
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November 13, 1998: 4:22 p.m. ET
Both markets focus on U.S. economic data, Gulf conflict, Fed meeting
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NEW YORK (CNNfn) - Stronger-than-expected U.S. economic data, a simmering crisis in the Persian Gulf and mixed views on what the Federal Reserve will do with interest rates next Tuesday left the bond market lower and the dollar mixed on Friday.
At around 4 p.m. the benchmark 30-year Treasury bond traded 1/32 of a point lower in price, at 99-30/32, for a yield of 5.25 percent.
The bond market started the day on a sour note and weakened further when data revealed that retail sales jumped 1 percent in October, about twice the average Wall Street forecast. The data, combined with news that the producer price index rose 0.2 percent last month, also a greater increase than the market had expected.
The stronger-than-anticipated data gave fodder to market players predicting the Federal Reserve will remain pat on interest rates when its policy making Federal Open Market Committee meets next Tuesday.
A mixed show of strength in the stock market also kept bonds under the water. But the losses were muted by buyers who sought safety in U.S. government debt securities as the latest standoff between the United States and Iraq continued to escalate and the U.S. military presence in the Persian Gulf increased.
Meanwhile, the possibility that Baghdad would back off and a military strike could be avoided took the luster off the dollar and sent the U.S. currency lower against the German mark.
The greenback ended the day trading at 1.6847 marks, down from 1.6930 in the morning.
But the dollar rose slightly against the Japanese yen as the market showed renewed doubt that Tokyo's latest tax package would be enough to pull the country's economy out of a recession.
The surprisingly robust U.S. economic data also kept the dollar afloat.
The U.S. currency closed at 122.75 yen, up from 122.15 at the start of U.S. trading. 
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