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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 659.00

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Nov 21 4:00 PM EST

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To: James F. Hopkins who wrote (17236)	6/14/1999 12:01:00 PM
From: Les H	Read Replies (2) of 99985

Dollar Surges on Intervention The bond market is higher this morning on a strong dollar. The highest yields in 18 months are also attracting buyers. Thirty-year bonds are up 9/32, yield 6.12%. Two-year notes are up 1/32, yield 5.66%. The Bank of Japan (BoJ) intervened in the currency markets, selling yen and buying dollars. The dollar is now quoted at 120.34 yen, up 2.45. Despite the positive Japanese GDP data reported last week, the BoJ wants to ensure the yen remains weak in order to keep Japanese exports strong. Relying on domestic demand to keep the economy growing would be too risky at this juncture. Business inventories for April rose .2%. This matched expectations. Retail inventories rose .7%, wholesale inventories rose .2% and auto dealer inventories rose 1.3%. The inventory to sales ratio (this measure the time it takes to move inventory) rose to 1.36 months from 1.35 months, a record low. Bonds had little reaction to the data. The Atlanta Fed index fell to 9.1 from a downwardly revised 12.5. Expectations were for an increase to 14.2. Production fell, new orders rose. Importantly, prices paid and received both fell. Bonds had little reaction to the data. Fed Chairman Greenspan will be testifying before the Joint Economic Committee (JEC) this morning on the effects of technology on the economy. Greenspan will also testify before the JEC on Thursday on monetary policy and the economic outlook. This will be very important. He is likely to give us a good picture of the Fed's leanings. No economic data on Tuesday. Market watchers and the Fed will be focusing on the release of CPI on Wednesday. Have a great day.

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