Washington - Treasury note and bond prices rebounded yesterday as the dollar strengthened against the German mark and Japanese yen.
"The bond market had a pretty good day; it was mostly driven by foreign exchange markets," said Elliott Platt, director of economics research at Donaldson, Lufkin & Jenrette Securities Corp.
The long end of the market took back everything it lost Thursday and then some. The market was closed Friday for Veterans Day. Late yesterday, the 30-year bond was quoted up 27/32 at a price 93 15/32, pushing its yield down to a two-week low of 8.08%. The 10-year note gained 15/32 to 99 20/32, pegging the yield at 7.93%.
Meanwhile, bills fell for the second straight day. Yields on three- and six-month bills rose to 5.41% and 5.95%, respectively.
Today, the Federal Open Market Committee is scheduled to meet. Many analysts expect the committee to raise the federal funds rate by another 50 basis points to 5.25%.
The move isn't likely to boost bond prices unless other economic reports coming out today are weaker than expected, Platt said. "The market would like to see a 100-basis-point move," he said.
Today, the Labor Department reports October retail sales and the Federal Reserve reports industrial production and capacity utilization in October. Both reports are expected to show solid growth.Treasury Market Yields Previous Previous Monday Week Month3-Month Bill 5.40 5.35 4.966-Month Bill 5.92 5.88 5.491-Year Bill 6.48 6.36 6.012-Year Note 7.01 7.04 6.543-Year Note 7.34 7.31 6.855-Year Note 7.63 7.72 7.247-Year Note 7.77 7.87 7.4110-Year Note 7.91 8.02 7.5930-Year Bond 8.07 8.16 7.81Source: Cantor, Fitzgerald/Telerate
Stock Market: The Dow Jones Industrial Average rose 28.26 points yesterday to close at 3829.73.
Foreign Exchange: In late New York trading yesterday, the dollar was quoted at 98.30 Japanese yen and 1.5445 German marks.
Commodities: The Commodity Research Bureau's index closed down 0.38 points yesterday, at 233.26.