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Politics : Idea Of The Day

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To: Jeff Jordan who wrote (29784)11/22/1999 3:54:00 AM
From: IQBAL LATIF  Read Replies (2) of 50167
 
This is important observation..
AS result of bond continues to behave like it is doing right now we will see that market will take a breather.. this point i have rasied last week in my post and today it was highlighted again by important analysts..

<<If the bond market believed this was a last pre-emptive
move
for this stage of the economic cycle, we would expect the long bond to
go
back below 6.00%. We were resting at the 6.00% earlier this week, but
have
since seen the long bond make a strong move to 6.17%. There is a clear
disparity between the expectations of the bond market and stock market
and
the possibility of one or more rate hikes ahead in the next six months.

Part of the move in interest rates is likely related to the sustained
move
in the price of oil and the stubbornness of this widely-watched
commodity to
retreat back below $23-$24 per barrel. December crude hit a 34-month
high
of $26.60 and some analysts predicted it may go as high as $28 a barrel
by
the end of the year. Oil is an especially important commodity to watch
because of it's weighting in many inflation related indices. So far
this
year, consumer prices have been rising at an annual rate of 2.8
percent,
compared with a 1.6 percent increase in 1998, but all of the increase
is due
to higher energy costs.>>
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