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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (54163)	8/1/1999 12:45:00 PM
From: Lucretius	Read Replies (1) \| Respond to of 86076

it appears others are figuring out my DBRSY leading the long bond higher in yield indicator (aussie buck leads most commodities -except gold of course which nobody wants -s-): Rate of Return Sun, 01 Aug 1999, 10:26am EDT Need Advice on Treasury Bonds? Look Down Under: Rates (Repeat) By Perri Colley McKinney Need Advice on Treasury Bonds? Look Down Under: Rates (Repeat) (Repeating to fix typographical error.) New York, July 30 (Bloomberg) -- David Mozina says investors who want to know where Treasury bonds are headed should watch what's happening to a currency half a world away -- in Australia. If the strategist at Merrill Lynch & Co. is right, U.S. bonds are poised to fall. Mozina, a native of Australia, is telling clients the currency and U.S. 10-year yields have run a parallel course 79 percent of the time since 1990. What's more, his research shows the Australian dollar leads Treasuries by three to six months, which gives investors plenty of time to plot their next move. ''It's one of the better indicators for Treasuries,'' Mozina said. ''If you believe the Aussie dollar is on a strengthening path, it's hard to get too aggressive on Treasuries.'' The Australian dollar has rallied 7 percent against the U.S. currency so far this year, reflecting expectations stronger global growth will boost prices for the commodities it exports. Higher commodity prices fuel inflation, which in turn drives U.S. bond yields higher. Australia's trade relationship with emerging-market economies also makes its currency a gauge of the risk global investors will tolerate. The more risk they'll take, the less they need the safety of U.S. government securities. Trouble Ahead With U.S. yields climbing, investors who bought 10-year notes at the start of the year have lost 6 percent, including price moves and reinvested interest payments. And if Mozina is right, they could be set for another round of declines as the Aussie dollar (say ''ozzie'') extends its gains, as many in the market expect. It rose to 65.31 U.S. cents today from 66.46 late yesterday. Ten-year yields rose 6 basis points to 5.93 percent. This far-away currency is by no means alone in signaling more Treasury losses. Traditional economic indicators, including employment cost and labor statistics Federal Reserve Chairman Alan Greenspan recently emphasized, point the same way. Next week's employment report will contain some important clues. U.S. unemployment in June probably held near its lowest in three decades, at 4.3 percent, while earnings rose 0.3 percent from 0.4 percent in May, according to a Bloomberg survey. Mozina also uses domestic measures to predict Treasury yields, though he relies on the Aussie dollar to tell him the timing and direction of moves. He compares start-of-the-month prices since 1990 for the dollar and 10-year Treasuries, which showed a 79 percent correlation in analysis. The 28-year-old then applies the theory of Granger causality, a method of establishing leading economic indicators that he learned as a honors student at Melbourne University. It proves the currency moves well before the bonds -- rather than changing directions simultaneously with the ebb and flow of global growth. Follow the Leader Take, for example, the dollar's 17 percent advance since last August. It sank to 55.3 U.S. cents on August 28 and then changed course, shooting up to a 13-month high of 67.47 U.S. cents on April 11. U.S. yields began climbing in earnest at the beginning of the year -- lagging the currency by about one quarter. ''When the Aussie turns, it leads Treasuries,'' Mozina said. ''It bottomed out in third quarter and yields bottomed out in the fourth.'' The same connection doesn't exist between commodity prices and Treasuries directly. Even as world economies are recovering and yields are rising, the benchmark Bridge-Commodity Research Bureau index isn't far off a 24-year low. ''Commodities are becoming an archaic representative of global growth,'' said Tim Fox, chief economist at currency strategist at Standard Chartered Bank. ''You might think the Australian currency is a commodity-based currency, but it's not solely.''

To: MythMan who wrote (54163)	8/1/1999 2:47:00 PM
From: Lucretius	Respond to of 86076

nutcase alert: Gold Price To Go Up To Us$325 By Year End Source: Africa News Service Harare - A South African commentator, who predicted 20 years ago that the price of gold would sky-rocket from US$266 an ounce to US$850 an ounce in six months, but was ignored by the market, says the price of gold, now currently below US$260 an ounce will rise to US$325 by the end of the year. cnniw.news-real.com@2@15@3@387&path=News/Category.NRdb@2@12@2@4