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

To: pater tenebrarum who wrote (19491)	7/6/1999 3:22:00 PM
From: Les H	Respond to of 99985

Debt Sales Return with a Bang A very heavy corporate calendar, treasury supply and lower foreign markets are driving bonds lower this morning. Thirty-year bonds are down 24/32, yield 6.07%. Two-year notes are down 4/32, yield 5.64%. The Treasury will auction $7 billion; 9.5-year inflation linked notes tomorrow. Household Finance, Ford Motor Credit, Sanwa Bank and Dime Bancorp are a few of the corporate names getting ready to issue debt. Dealers sell treasuries to hedge the new supply. Japan's Tankan survey, the key measure of business confidence, rose to – 36 from –47. This was very close to expectations. The report prompted yen sales, as the Bank of Japan is firmly committed to a weak yen in order to aid exports. Japan also reported household spending rose 3.6% in May. Both of these numbers appear to confirm the rebound in the Japanese economy. JGB's (Japanese sovereign debt) fell sharply on the data. A stronger economy is raising fears of higher inflation and tighter monetary policy. The euro set a new low against the dollar, $1.0185. Fears that France will abandon its budget deficit target prompted the decline. Oil hit $20.00/barrel in overseas trading. This is its highest level since 11/97. OPEC appears to be adhering to its production targets. Rebounding foreign economies have increased demand for oil in a lower supply environment. The Bank of England sold 25 metric tons of gold at $261.20. This was the first major gold auction in 20 years. The Bank of England has said they will sell 415 metric tons of gold. The next auction is slated for 9/21. Domestically, economic data is very light. Non-manufacturing NAPM rose to 61.0 from 60.0. This is not a number the market places heavy significance on. Nothing tomorrow. Consumer credit, jobless claims and wholesale inventories will be released on Thursday. Have a great day. bonds-online.com