WASHINGTON -- Fears of a sliding dollar kept the long end of the Treasury securities market in a modest funk yesterday, analysts said. The dollar tested new lows against the Japanese yen in the morning, but regained most of what it lost by late afternoon, trading at 97.35 yen.
Late yesterday, the 30-year bond was quoted down #37/32 at a price of 95 15/32 with a 7.89% yield, up two basis points from the previous day's close. The 10-year note lost 8/32 to a 97 1/32 price and a yield of 7.68%.
The short end was narrowly mixed. The yield on three-month bills fell to 5.02% from 5.06%, and six-month yields were quoted at 5.57%, up from 5.56%.
"Clearly the focus this week is weakness in the dollar," said Brian Wesbury, chief economist of Griffin, Kubik, Stephens & Thompson Inc. in Chicago.
Dollar paranoia was not soothed by the August trade report, released yesterday by the Commerce Department, market participants noted. The U.S. trade deficit fell to $9.7 billion in August fromS11.2 billion; the deficit with Japan, however, rose to $5.8 billion, the highest in more than a year, the report said.
Joseph Bench, a portfolio manager with New Castle Advisers in White Plains, N.Y., said he had hoped the improved overall trade picture would boost the dollar, thus boosting the bond market, but it didn't. "It was pretty much of a disappointment," he said. Treasury Market Yields Previous Previous Wednesday Week Month 3-Month Bill 5.01 5.10 4.906-Month Bill 5.55 5.55 5.381-Year Bill 6.05 5.99 5.882-Year Note 6.63 6.65 6.493-Year Note 6.92 6.95 6.785-Year Note 7.33 7.34 7.197-Year Note 7.51 7.49 7.3810-Year Note 7.66 7.68 7.5530-Year Bond 7.88 7.89 7.80 Source: Cantor, Fitzgerald / Tolerate
Stats
Stock Market: The Dow Jones Industrial Average rose 18.50 points yesterday to close at 3936.04.
Foreign Exchange: In late New York trading yesterday, the dollar was quoted at 97.33 Japanese yen and 1.5013 German marks.
Commodities: The Commodity Research Bureau's index closed up 1.45 points yesterday at 231.17.
