Tom,
Looks like You made a great move on the bonds.
Will be interesting to see how long it continues.
Bonds Follow Dollar Lower
The Associated Press
NEW YORK (AP) -- Treasury bond prices fell Tuesday as the dollar weakened against the Japanese yen and as U.S. stock prices continued to recover.
The price of the benchmark 30-year Treasury bond fell 29-32 point, or $9.06 per $1,000 in face value. Its yield, which moves in the opposite direction, rose to 5.20 percent from 5.15 percent late Monday.
Bonds were hurt by the eroding value of the dollar, which dropped to its lowest level in more than two years against the yen. If the dollar continues to decline, dollar-denominated bonds become less attractive to foreign investors.
In addition, the Dow Jones industrial average shot up 126.92 points Tuesday and the Standard & Poor's 500-stock index and Nasdaq composite index both hit new highs. A rising stock market competes with bonds for investors' dollars.
In the broader market, prices of short-term Treasury securities were down between 1/8 and 3/16 point, and intermediate maturities were off 1/4 point to 15-32 point, reported Bridge Telerate, a financial information service.
The Lehman Brothers Daily Treasury Bond Index, reflecting price movements on bonds with maturities of a year or longer, fell 3.01 points to 1,315.82.
Yields on three-month Treasury bills were 4.47 percent as the discount fell 0.01 point from auction Monday to 4.37 percent. Six-month yields were 4.56 percent, as the discount fell 0.01 point from the auction to 4.41 percent. One-year yields were 4.54 percent as the discount fell 0.03 point from late Monday to 4.35 percent.
Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.
The federal funds rate, the interest on overnight loans between banks, fell to 4.50 percent from 5.25 percent.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds fell to 124 7/16 from 124 23-32. The average yield to maturity rose to 5.18 percent from 5.17 percent.
AP-NY-01-05-99 1846EST
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