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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John T. who wrote (16428)	6/8/1999 2:54:00 PM
From: Les H	Respond to of 99985

The Wait Continues Bonds are little changed this morning as the wait continues for the economic data scheduled for release later this week and next. The Fed and the markets will carefully analyze the PPI and retail sales data, both on Friday and the CPI data the following Wednesday. Thirty-year bonds are up 7/32, yield 5.95%. Two-year notes are up 1/32, yield 5.52%. Non-Farm productivity for the first quarter was revised from 4.0% to 3.5%. Despite the downward revision, productivity is still running at a faster pace than last years 2.2% rate. Unit labor cost was revised from .3% to .7%. Worker output was revised from 5.0% to 4.4%. The implicit price deflator (a measure of inflation) was revised from 1.0% to 1.1%. Strong productivity is an important factor for the Fed. Wage increase can only be tolerated when productivity is increasing. Wholesale inventories for April rose .2%. Expectations were for a rise of .1%. Wholesale sales were unchanged. The inventory to sale ration was unchanged at 1.3 months. This measures the time it takes inventories to turn over. Yesterday consumer credit for April was reported to have risen by $3.7 billion. Expectations were for a rise of $5 billion. However, the previous month was revised from a rise of $1.6 billion to a rise of $5.1 billion. Consumer credit, as a percentage of disposable income, is at 21.11%, near a record high. The consumer is alive and well. The euro rose on news Germany's first quarter GDP rose .4%. Expectations were for a rise of .2%. Factory orders also posted a larger than expected increase of 3.3%. Germany is the euro zones largest economy and accounts for 30% of the output of the 11-nation euro zone. There is hope the euro zone economic region is beginning to rebound. Japan's Economic Planning Agency (EPA) said Japan's economy has stopped declining, although a significant rebound is not yet in sight. The EPA stated that more government spending is necessary to get the economy moving. Japan will report its first quarter GDP on Thursday. Expectations are for a decline of .2%. This would be the sixth consecutive decline. No economic data is scheduled for release tomorrow. Have a great day. bonds-online.com