WASHINGTON- An afeternoon sell-off that analysts found difficult to explain pushced Treasuries down yesterday in thin trading, with the long end falling more than the short end.
The 30-year bond was quoted late yesterday down 15.32 at a price of 95 24.32 to yield 7.87%, up from Monday's 7.83%. The 10-year note dipped 10/32 to 97 8/32 with a 7.65% yield, up form 7.60%.
On the short end, three-month bills were yielding 5.06% late yesterday and six-month bills were yielding 5.56%.
"It was a mystery," said Elliot Platt, director of economic research at Donaldson, Lufkin & Jenrette Securities Corp. "There's not much conviction in the market, so profit-taking took its toll."
The lack of conviction was exemplified early in the day when bonds reacted negatively to a relatively minor comment form Federal Reserve governor Susan Phillips during a speech in Florida. Phillips said that economic growth continued to surprise analysts on the up side.
Continued pressure on the dollar against the German mark and rising oil prices fed the negative tone, market observers said.
"There was not really any overriding factor," said Bernard Jensen, head U.S. government bond trader at Fuji Securities Inc. "There was a downdraft."