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Bonds Rise, Dollar Dips |
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Upcoming debt auctions keep Treasury markets subdued; greenback falls ahead of trade gap report.
May 10, 2005: 10:06 AM EDT
NEW YORK (CNN/Money) - Treasury prices moved higher Tuesday as stock markets looked set to open lower and traders braced themselves for $51 billion in government debt auctions. The dollar, meanwhile, dipped against the euro and yen. The benchmark 10-year note rose 5/32 of a point to 97-31/32 to yield 4.25 percent, down from
4.28 late Monday, while the 30-year bond gained 7/32 of a point to 111-16/32 to yield 4.60
percent, down from 4.62 on the session. Bond prices and yields move in opposite directions.
The five-year note added 4/32 of a point to yield 3.95 percent, and the two-year edged higher
2/32 of a point to yield 3.70 percent.
A slow start for stocks gave Treasury prices a lift early Tuesday, but trade was slow ahead a
$22 billion, three-year note auction set for later in the day.
The sale kicks off a week of debt auctions, with $15 billion of five-year notes hitting the market
Wednesday and $14 billion of 10-year notes on sale Thursday.
Analysts said the new debt could be a challenge to sell at current prices, which would pressure
bonds; and that prices could fall further if retail sales numbers, set to be released the morning
of the 10-year note sale, come in strong.
Bond and currency markets were quiet ahead of Wednesday's trade balance report for March.
The ballooning trade gap has been a major factor behind the dollar's decline during the past
few years, and Wednesday's release could put the spotlight back on structural problems in the
world's largest economy.
In currency trading, the dollar gained against the yen and hit a three-week high against the
euro early Monday.
The euro bought $1.2854, up from $1.2843 late Monday, while the dollar bought ¥105.49,
down from ¥105.63 in the previous session.
"There's always the risk that a worse-than-expected number would lead to a selloff in the
dollar," Tom Vosa, head of market economics at National Australia Bank, told Reuters.
Find this article at:
http://money.cnn.com/2005/05/10/markets/bondcenter/bonds/index.htm |
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