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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (6329)	6/26/2002 7:33:58 AM
From: John Pitera	Read Replies (1) \| Respond to of 33421

The G-8 meeting , The Fed meeting and the fear .... oh my.... Lions... and Tigers ... and Bears oh MY!! ------------------------------------- 15:31 ET 10-year: -2/32..4.837%....GNMAs: -1/32....$-¥: 121.40 The Treasury put the final word on the 2-year note auction initially scheduled for tomorrow -- Postponed until further notice. The battle over the debt limit has risen to the next level as marketable debt auctions are now on the chopping block. Thank you Congress. The next steps to keep the government running without the ability to raise funds are overviewed in one of last week's Bond Brief titled Political Costs . 14:20 ET 10-year: -6/32..4.854%....GNMAs: unch....$-¥: 121.49....Euro-$: 0.9761 Dollar back in negative territory on the day as stocks sink. JPY: After weakening in the morning trading session vs. the dollar, the Yen has spiked back near its strongest level of the day (Y121.39), currently trading Y121.49. US Treasury Secretary O'Neill's negative comments on the Japanese economy weighed on the Yen for a while. As stocks fell off traders took that as an opportunity to buy. These comments came ahead of the G-8 summit in Canada which begins tomorrow. On the upside watch for Y121.35 and Y120.85 from there. As support, use Y122.00 and Y122.45. EUR: The Euro traded lower vs. the dollar for much of the morning on the weaker than expected IFO report and quiet flows. The weakness in US equities (Dow had been up more than 130 pts.) turned things around and gave the Euro a huge bid as it's now trading close to its high for the day at 0.9761. If we hold above 0.9755, watch for 0.9815 on the upside. 14:19 ET 10-year: -6/32..4.854%....GNMAs: -2/32....$-¥: 121.56 As the market is only prepared for an on-hold, no bias policy statement from the Fed tomorrow we've updated the Fed Brief with our thoughts on the current and extended policy outlook. The futures market prices in the first policy tightening off in November which could be delayed until 2003 given the weak pace of business investment and labor market conditions. The policy wait continues. 13:52 ET 10-year: -3/32..4.841%....GNMAs: -1/32....$-¥: 121.695....Euro-$: 0.9743 Hearing from a dealer that a lack of asset allocation out of bonds into stocks is what took the steam out of the equity markets. This, in turn, is responsible for Treasury prices coming off their lows. Yesterday we saw selling of bond futures vs. buying SPX futures. Traders were hoping to see that trade continue today, to no avail.