WASHINGTON -- Follow-through trading in the Treasury market yesterday kept prices moving in the same direction as Wednesday, with the long end slipping and the short end gaining. Trading was very light.
The long bond lost seven ticks, closing at 95 92/32 with a 7.85% yield, after losing nearly 3/4 of a point Wednesday. The 10-year note ended yesterday down one tick at 100 14/32, yielding 7.81%, following an 11-tick slide the previous day.
The short end gained as yields on both six-month and year bills fell five basis points to 6.47% and 7.14%, respectively. Three-month bills were unchanged at a 5.61% yield, after shedding a whopping 15 basis points on Wednesday.
The dollar tumbled Wednesday, providing the technical springboard for the fall in note and bond prices. Yesterday, the dollar regained a portion of what it lost, but not enough to halt the trend in Treasury prices, analysts said.
The Commerce Department reported that the index of leading U.S. economic indicators rose 0.3% in November, the biggest gain in three months. Also, the Labor Department said initial jobless claims fell 3,000 to 322,000 in the week ended Dec. 24.
The long end of the market was unfazed by the reports. But they are two more in a string of strong economic reports. The market seems to be betting this strength will begin to abate soon, analysts said. However, that remains to be seen, they cautioned.
Treasury Market Yields Previous Previous Thursday Week Month3-Month Bill 5.65 5.54 5.706-Month Bill 6.52 6.40 6.221-Year Bill 7.20 7.01 6.862-Year Note 7.69 7.54 7.403-Year Note 7.76 7.67 7.615-Year Note 7.81 7.74 7.787-Year Note 7.79 7.77 7.8310-Year Note 7.78 7.79 7.9030-Year Bond 7.83 7.84 8.00
Source: Cantor, Fitzgerald / Telerate
Stats
Stock Market: The Dow Jones Industrial Average fell 6.06 points yesterday to close at 3833.43.
Foreign Exchange: In late New York trading yesterday, the dollar was quoted at 99.61 Japanese yen and 1.5520 German marks.
Commodities: The Commodity Research Bureau's index closed down 0.49 point yesterday, at 236.35.
