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

To: Haim R. Branisteanu who wrote (19677)	7/8/1999 1:58:00 PM
From: Les H	Respond to of 99985

The Song Remains the Same (Led Zeppelin) Heavy corporate supply and a struggling European bond market continue to pressure domestic bond prices. Thirty-year bonds are down 12/32, yield 6.08%. Two-year notes are down 1/32, yield 5.63%. Federal Home Loan Mortgage Corp. will price a $3 billion five-year reference note today. Ford Motor Credit is in line to price a multi trance deal. First USA Bank, Sanwa Bank and Phillips Petroleum are just a few names in line to sell debt. The euro's problems continue as the European Central Bank refuses to intervene in the currency markets. Germany's Finance minister Eichel said a weak euro is not a problem and "good for exports" (on the other side of the world, the Bank of Japan has intervened five times since June 1 to keep the yen weak because it is "good for exports"). This sent the euro to a new low, $1.0153. The euro is now down 13% on the year. As the euro continues to depreciate, demand for European bonds is evaporating. German ten-year bond yields are at their highest level in more than one year. Yields are higher on all other euro zone bonds. Our bonds are trading lower in sympathy. Initial jobless claims fell 6,000 to 294,000. A rise of 5,000 was expected. The decline may be possibly be attributed to the July 4th holiday. Nevertheless, the labor market remains very tight. Wholesale inventories for May rose .3%, sales rose 1.5%. The inventory to sales ratio fell to 1.28 months from 1.30 months, its lowest level since 10/97. This measures the time it takes to move goods out of inventory. There was little reaction to the data. Consumer credit for May will be released later this morning. Expectations are for a rise of $5.4 billion. No economic data tomorrow. Have a great day. bonds-online.com