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

To: Freedom Fighter who wrote (67416)	9/9/1999 12:05:00 PM
From: Les H	Read Replies (1) \| Respond to of 132070

US TSY MKT REMAINS UNDER PRESSURE; FOCUS ON INFLATION DATA NEW YORK (MktNews) - U.S. Treasuries remained under pressure late Thursday morning as traders eyed sharply higher NYMEX crude oil futures and worried over upcoming U.S. inflation data and higher interest rates overseas. A permanent addition of reserves by the Federal Reserve put a floor under the market, but did little to spark new buying. The Fed bought short-term coupons maturing April 20, 2000 through Nov. 15, 200, with three exceptions. NYMEX Oct crude oil futures were up 32 cents a barrel at $22.98 at mid-morning, adding to gains posted Wednesday when the contract hit a 23-month high. "Higher oil prices and fears of higher rates abroad, that's what's keeping us under pressure," said a Treasury futures strategist. Dealer and commercial activity was two-way in futures throughout the morning, but a European-based firm attracted the most attention when it sold an estimated 4,000 Dec T-bonds on the day, traders said. A New Jersey-based consultant issued projections on August producer price index, slated for release Friday. According to sources who receive the report, the consultant said overall August PPI could be reported as high as up 0.5%, with the core rate up 0.1%. In addition, the analyst said August consumer price index, to be released Wednesday week, also will see a 0.5% rise overall and a 0.1% increase in its core. He attributed the steep gain in the overall inflation indexes to higher energy usage and poor crops during the summer drought, offset to some degree by lower auto and computer prices. A Market News International survey produced a median estimate for PPI of up 0.4%, with "core" prices up 0.1%. The median MNI estimate for CPI was up 0.3% overall and up 0.2% for the core. Adding to Thursday's bearish sentiment was U.S. dollar weakness against the yen. The dollar fell overnight as Japan's second-quarter gross domestic product was reported at a higher-than-expected growth pace, and approached a yearly low around Y108.25 on comments from New York Fed President William McDonough, who said the dollar/yen drop was not significant for the U.S. economy. McDonough also said that while the economy has benefitted from the two recent Fed rate hikes, further increases should not be ruled out if needed. Initial state unemployment claims, released at 8:30 a.m. EDT Thursday, were reported declining by 4,000 to 286,000 for the week ended Sept 4, but had little market impact. But economists said the data suggested the U.S. labor market remains tight. The yield on the 30-year bond was 6.088% at 11:07 a.m. EDT, compared with 6.091% at 8:16 a.m. EDT.-- Suzanne Cosgrove; Chicago newsroom; 312-697-9675, cosgrove@marketnews. com.