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Dollar up, bonds mixed
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November 19, 1998: 4:22 p.m. ET
Investors find little inspiration in the day's economic data, FOMC minutes
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NEW YORK (CNNfn) -U.S. Treasurys closed mixed and the dollar rose Thursday as investors drew conflicting conclusions from the day's economic data and the release of the minutes from the Federal Reserve's policy meeting a month ago.
At around 4 p.m. ET the benchmark 30-year Treasury bond rose 9/32 of a point in price to trade at 100-2/32 and a yield of 5.24 percent.
The bond market started the day on a high note, drawing modest inspiration from the morning's economic reports -- a higher-than-forecast reading in the weekly jobless claims report, a stronger-than-expected October housing starts report, and the Federal Reserve Bank of Philadelphia's business activity index, which came in weaker-than-anticipated.
The data, suggesting robust activity in interest-rate sectors of the economy like the housing market, but a slightly less heated manufacturing sector, did little to inspire investors for a bond shopping spree and left the market to trade in a pattern similar to Wednesday's -- with long maturities gaining ground, while the shorter end of the yield curve eroded.
The market also found little inspiration in the afternoon release of the minutes from the Federal Reserve's Sept. 29 policy meeting and a subsequent conference call that resulted in an interest-rate cut on Oct. 15. The Fed's minutes showed that the central bank's view of the economy included a tight labor market, but few signs of inflation, leading to the interest-rate easing on Sept. 29 and the last one, just two days ago.
While stock investors saw a sign in the minutes that another rate cut could be possible before too long, bond market players seemed to find confirmation of their own conclusion that the Fed is done cutting rates for the rest of this year. That, in turn, led to the lackluster performance in Treasurys.
Meanwhile, the dollar rose against the Japanese yen attracting late buyers who sought to buy the U.S. currency at lower levels after its overnight decline.
The dollar fell overnight against the yen after Japan's ruling Liberal Democratic Party got into an alliance with the country's Liberal Party, a move that is expected to bolster Tokyo's economic reforms and speed up the Japan's recovery from its current recession.
But a more skeptical outlook crept among investors in late trading, leading the dollar up to 119.62 yen from 118.83 at the start of U.S. trading.
The dollar's movement against the German mark was relatively uneventful, as the greenback advanced to 1.6862 marks by the end of U.S. trading from 1.6745 in the morning. 
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