WASHINGTON -- Treasury security prices were nudged up yesterday by modest gains in the dollar against the Japanese yen and German mark and more short-covering following big losses last week, analysts said.
"Strength in the dollar was a very positive development," said Brian Wesbury, chief economist of Griffin, Kubik, Stephens & Thompson Inc. in Inc. in Chicago.
The long bond late yesterday was quoted up 5/32 at a price of 93 4/32 and a yield of 8.11%; and 10-year notes were trading up five ticks at 95 5/32 and a 7.97% yield.
The short end also improved, with yields on three- and six-month bills falling to 5.35% and 5.87%
The Republicans' resounding victory on Tuesdya was probably a favorable event for bonds, Wesbury speculated. But in the short term, the market has too many other things to worry about, such as an expected credit tightening by the Federal Reserve next week, he said.
The Republicans' resounding victory on Tuesday was producer price report. Analsts on average expect 0.2% gains on both the producer price index and the core rate, which excludes food and energy items.
A surprisingly good PPI report would likely have more impact on the market than a worse than expected showing because the market is already priced for a lot of bad news in the coming weeks, Wesbury said. Treasury Market Yields 3-Month Bill 5.33 5.20 5.106-Month Bill 5.85 5.75 5.551-Year Bill 6.31 6.23 5.992-Year Note 7.01 6.96 6.653-Year Note 7.36 7.18 6.955-Year Note 7.66 7.63 7.347-Year Note 7.81 7.79 7.4910-Year Note 7.96 7.94 7.6830-Year Bond 8.10 8.09 7.89 Source: Cantor, Fitzgerald / Telerate
Stock Market: The Dow Jones Industrial Average rose 1.01 points yesterday to close at 3831.75.
Foreign Exchange: In late New York trading yesterday, the dollar was quoted as 97.77 Japanese yen and 1.5275 German marks,
Commodities: The Commodity Research Bureau's index dosed down 0.76 point yesterday at