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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (65121)	7/23/1999 12:01:00 PM
From: Les H	Respond to of 132070

Both Germany and Spain CB's also reiterated Greenspan's hawkish stance on inflations. Greenspan Sounds Inflation Alert Bonds continue to trade lower following Fed Chairman Greenspan's Humphrey Hawkins testimony yesterday. Thirty-year bonds are down 9/32, yield 5.99%. Two-year notes are down 1/32, yield 5.54%. Prior to Greenspan's testimony, the thirty-year yielded 5.87% while two-year notes yielded 5.39%. Greenspan expressed concern the economy may be expanding at too fast of a pace. He is concerned that if the labor market continues to grow, inflationary pressures will be ignited. He also stated that if productivity so much as stalls, inflation will become a problem. The Fed will act "promptly and forcefully" on inflation signs. This comment would appear to indicate that a rate rise of 50 basis points might be in the offing. Greenspan did point out that the Fed does want to see more economic data for evidence of problems before acting. The next FOMC meeting is 8/24. We will want to monitor the following economic releases very carefully: second quarter GDP and the employment cost index 7/29, the personal income deflator 7/30, unemployment 8/6, PPI 8/13, productivity 8/15 and CPI 8/17. The yen continues its ascent against the dollar. It is now up 3.0% in the past two months, despite massive currency intervention. Much foreign money is flowing into Japan, as it is perceived their economy is firmly on the path to recovery. The dollar currently stands at 116.45 yen. Five German states reported inflation running in the .4%-.5% area. This compares to 0%-.2% reported previously. This, coupled with stronger inflation reported by Italy yesterday, is raising the probability of a European Central Bank tightening. No economic data today. Next week will bring lots of data, the most important being our first look at second quarter GDP and the employment cost index. Have a great weekend. bonds-online.com