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Bond slide continues
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November 24, 1999: 9:20 a.m. ET
Treasury yields rise as another blitz of data rekindles rate hike fears
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NEW YORK (CNNfn) - Treasury bonds fell Wednesday, pushing yields to their highest levels of the month, after another batch of strong economic data revived fears the Federal Reserve may hike interest rates to slow growth.
Just before 9:10 a.m. ET, the price of the benchmark 30-year bond fell 11/32 to 98-23/32. Its yield, which moves inversely to the price, rose to 6.21 percent from 6.19 percent Tuesday.
Bonds, hurt by another spike in oil prices overnight, extended those losses after the government said third-quarter gross domestic product rose a higher-than-expected 5.5 percent, upwardly revised from the previously reported 4.8 percent.
Separately, the Labor Department said the number of Americans filling for first-time jobless benefits fell to 274,000. The smaller-than-expected figure signals that the labor market, in which the unemployment rate remains near a 29-year low, continues to tighten.
"It's hard to come up with positives in the market," said David Ging, Treasury market strategist at Donaldson Lufkin & Jenrette, referring to the day's strong, inflation suggesting economic data. "It's another leg in the string of factors that point to a long stream of losses in bonds."
Ging see yields rising as long as the economy continues showing signs of strengthening, something he expects will happen.
Bonds have lost value nearly every day since the Federal Reserve raised its main lending rate last week.
Those losses continued overnight with another spike in oil prices. Benchmark Brent crude in London shot up another 40 cents to $25.55 a barrel in mid Wednesday trading, just 35 cents below a post-Gulf War high of $25.90 struck on Monday.
Analysts fear these oil gains will eventually show up in the Producer Price Index and Consumer Price Index, prompting the Federal Reserve to hike interest rates.
With an early close Wednesday and Friday and a full close Thursday for Thanksgiving, traders expect no major price movements until next week, when the Labor Department issues its last monthly employment report of the year.
Dollar stronger
The battered euro, which has lost value year-to-date, fell to a four-month low against the dollar Wednesday.
Still, analysts call the euro's move more about downward momentum than about weakening economic fundamentals in the euro zone
It's "driven more by position adjustment than fundamentals," Ruesch International said in a note to clients.
Just before 9:10 a.m. ET, the euro slipped to $1.0232 from $1.0278 late Tuesday, a 0.45 percent fall in the euro's value.
The dollar, meanwhile, strengthened slightly against the yen, helped by rumors that the Japan's government would step in to weaken its rebounding currency.
The dollar rose to 104.53 yen from 104.33 Tuesday, a 0.19 percent gain in the dollar's value.
Analysts fret that a strong yen, because it makes export tougher to sell, will hurt the Asian nation's fragile recovery.
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