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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (69181)	4/13/2004 8:46:52 AM
From: Harvey Allen	Read Replies (1) \| Respond to of 94695

U.S. Treasuries Extend Decline as U.S. Retail Sales Increase April 13 (Bloomberg) -- U.S. Treasuries extended an earlier decline after the government said retail sales rose in March. Demand for government securities slumped as sales at U.S. retailers rose 1.8 percent in March, the biggest increase in a year, a government report showed. Sales were expected to increase 0.7 percent, according to the median forecast of 65 economists surveyed by Bloomberg News. The 4 percent note maturing in February 2014 dropped 5/8, or $6.25 per $1,000 face amount, to 97 1/2 at 8:32 a.m. in New York, while its yield rose to 4.31 percent, according to according to Banc of America Securities. One basis points equals 0.01 percentage point. U.S. retail sales have increased since October, the longest run of gains since 1999. The U.S. economy will expand by 4.6 percent this year, the fastest since 1984, according to a Bloomberg News survey of 74 economists from March 26 to April 5. ``The only thing that was missing was jobs -- and they're no longer missing,'' Federal Reserve Bank of Dallas President Robert McTeer Jr. said yesterday in an interview with CNBC. Treasuries fell yesterday after Robert Parry, president of the San Francisco Fed, said the key U.S. interest rate has the potential to rise to about 3.5 percent from 1 percent now if inflation averages 1 percent to 2 percent. Inflation erodes the value of bonds' interest payments. Parry, a non-voting member of the Fed's rate-setting Federal Open Market Committee, spoke in an interview published in the San Francisco Chronicle on Sunday. Rate Expectations The Fed has since June kept its target for overnight loans between banks the lowest since July 1958 as hiring slumped and on concern inflation may slow. Investors brought forward expectations of a Fed rate increase after the employment report showed the economy added 308,000 jobs in March. The creation of the most number of jobs since April 2000 is no reason to move up forecasts for a Fed rate increase, according to most of Wall Street's largest bond dealers. Of the primary dealers surveyed by Bloomberg News last week, 12 predicted the Fed will boost rates this year, the same as in a March 15 survey. ``In the bigger picture the Fed is to remain on hold this year,'' said Jitzes Noorman, a fixed-income analyst in Utrecht, the Netherlands, at Rabobank Groep, the third-biggest Dutch lender. ``There is room for higher bond prices in the long term.'' The consumer price index, minus food and energy, probably rose 0.2 percent in March from the month before, according to the median estimate of 64 analysts surveyed by Bloomberg News. The Labor Department will release the report tomorrow. Inventories at record lows have spurred factories to increase production to keep up with demand from consumers and businesses. The Federal Reserve may say on Friday industrial production rose 0.3 percent in March, its third month of gains, according to analysts surveyed by Bloomberg News. quote.bloomberg.com