WASHINGTON -- Growing fears that the Clinton Administration will embrace a middle-class tax cut and a barrage of expectedly bearish economic reports depressed Treasury security prices across the board yesterday.
Late yesterday, the 30-year bond was quoted down 23/32 at 95 5/32, pushing the yield up to 7.92%. The 10-year lost 1/2 at 100 1/32, yielding 7.87%. Not far off, five-year notes fell 14 ticks, with the yield rising to 7.85%.
Meanwhile on the short end, yields on three-month bills were up 10 basis points at 5.93%, and returns on six-month maturities rose 13 basis points to 6.60%.
Over the weekend, President Clinton reportedly made statements positioning himself one step closer to giving in to the Republicans' push for a middle-class tax cut.
"That's where the bad tone [in yesterday's market] began," said Hugh Johnson, chief investment officer at First Albany Inc.
On top of that, analysts expect essentially all bearish news for bonds out of the slew of reports due out the rest of the week.
Today's producer price report and tomorrow's consumer price report are expected to show higher inflation than seen in the two prior months. Also, today's retail sales report and tomorrow's industrial production reports are expected to show solid gains, with the capacity use rate expected to reach a worrisome 84.8% in November.
In addition, the Philadelphia Federal Reserve Bank is expeced to release a strong regional business report on Thursday.
Treasury Market Yields Previous Previous Monday Week Month3-Month Bill 5.87 5.94 5.406-Month Bill 6.55 6.56 5.921-Year Bill 7.22 7.09 6.482-Year Note 7.63 7.57 7.013-Year Note 7.76 7.67 7.345-Year Note 7.81 7.76 7.637-Year Note 7.82 7.79 7.7710-Year Note 7.85 7.81 7.9130-Year Bond 7.91 7.91 8.07
Source: Cantor, Fitzgerald / Telerate
Stock Market: The Dow Jones Industrial Average rose 27.26 points yesterday, to close at 3718.37.
Foreign Exchange: In late New York trading yesterday, the dollar was quoted at 99.98 Japanese yen and 1.5724 German marks.
Commodities: The Commodity Reserach Bureau's index closed up 0.8 point yesterday, at 230.10.