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

To: donald sew who wrote (23983)	8/27/1999 11:04:00 AM
From: Les H	Respond to of 99985

interesting note on dollar/yen intervention... MARKET JITTERS Bonds are lower this morning as the market is worrying about whether the Fed is truly through raising interest rates for the year. Thirty-year bonds are down 6/32, yield 5.91%. Ten-year notes are down 5/32, yield 5.79%. Two-year notes are down 1/32, yield 5.60%. Fed Chairman Greenspan in a speech that opened the Fed conference in Jackson Hole did not address monetary policy. He did however say that stock prices are having a rising influence on monetary policy. Greenspan also said the Fed must understand stocks and stock market panics better. The Fed also needs to better understand the wealth effect. The ?98 market disruptions are now ?largely dissipated?. Bonds had little reaction to his comments. Personal income for July rose .2% with expenditures up .4%. Expectations were for a rise of 4% and .5%, respectively. Income was weaker than expected because of a sharp drop in farm subsidies. Wages and salaries rose a very strong .7%. This would imply consumption should remain strong. The savings rate declined 1.4%. Utility usage accounted for .6% of the gain in expenditures. Bonds had little reaction to the data. Supply is beginning to build. Federal National Mortgage Association is scheduled to sell $3 billion ten-year benchmark notes today. Safeway is scheduled to sell $1.5 billion in a multi-tranche deal next week. PNC funding may sell $600 million in securities. Other names are on the list. This has the potential to put pressure on the bond market. Help me if you can. Japan is rumored to be looking for help from other countries to help stem the rise in the yen. So far this has had little impact on the dollar/yen. Next week will bring lots of economic data. The most important will be the unemployment data on Friday, revisions to productivity on Thursday and the National Association of Purchasing Managers index (NAPM) on Wednesday. Have a great weekend. bondsonline.com