WASHINGTON -- Yesterday's better-than-expected September producer price report pushed the entire Treasury security yield curve down slightly.
The Treasury 30-year bond was quoted late yesterday up 13/32 at a price of 95 27/32 to yield 7.86%, down from 7.89% the previous day. Meanwhile, the 10-year bond gained 10/32 to 97 6/32 for a 7.66% yield.
On the short end, the yield on three-month bills fell to 5.05% late yesterday and the yield on six-month bills dropped to 5.53%.
The PPI dropped 0.5% in September, while the core index, which excludes food and energy, gained a slim 0.1%, the Labor Department reported. This was the biggest drop in the overall index in 13 months.
However, "there is still quite a bit of nervousness in the market," said Kathleen Stephansen, senior economist at Donaldson, Lufkin & Jenrette Securities Corp., because the consumer price report and other key reports are due out this morning.
The CPI report has more of an impact on what the Federal Reserve does than the PPI report, Stephansen noted.
Nonetheless, the PPI report helped remove some of the "sense of urgency" about another Fed credit tightening, she said. "Market participants were encouraged," she added.
Also today, the Commerce Department releases the September retail sales report and the Fed releases the September industrial production and capacity utilization report.
Treasury Market Yields Previous Previous Thursday Week Month3-Month Bill 5.02 5.07 4.676-Month Bill 5.52 5.59 5.121-Year Bill 5.96 6.06 5.672-Year Note 6.61 6.70 6.243-Year Note 6.90 7.01 6.535-Year Note 7.29 7.41 6.947-Year Note 7.45 7.58 7.1710-Year Note 7.63 7.76 7.3230-Year Bond 7.84 7.94 7.62
Source: Cantor, Fitzgerald / Telerate
Stock Market: The Dow Jones Industrial Average rose 14.80 points yesterday to close at 3889.95.
Foreign Exchange: In late New York trading yesterday, the dollar was quoted at 99.39 Japanese yen and 1.5279 German marks.
Commodities: The Commodity Research Bureau's index closed down 0.20 point yesterday at 227.54.