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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (20174)	10/18/2004 9:38:30 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

Somewhat USD unfriendly TIC report this morning. Looks like the BOJ or maybe just the Fed (?) are right back in there intervening to stem the losses though. Treasuries Little Changed as Net Foreign Purchases Decrease Oct. 18 (Bloomberg) -- U.S. Treasury notes remained little changed after the government said international investors purchased a net $14.6 billion of U.S. government debt in August, less than the $22.4 billion in July. Foreign investors pared back their purchases as the U.S. Treasury Department prepares to sell about $109 billion of debt by the end of November, according to Jersey City, New Jersey- based government finance research firm Wrightson ICAP. Before the report, economists at Goldman Sachs Group Inc. estimated about a net $30 billion of Treasuries were bought. The 4 1/4 percent note maturing in August 2014 was at 101 9/16 to yield 4.05 percent at 9 a.m. in New York, according to bond broker Cantor Fitzgerald LP. Treasury notes maturing in five and 10 years may drop in coming months on expectations that foreign central bank purchases of the debt will decline next year, Banc of America Securities LLC debt strategists said last week in a research note. The Federal Reserve's holdings of Treasury debt for foreign central banks and international accounts rose by $412 million in September, the least since July 2003, Banc of America said. Japanese Ministry of Finance figures show the country's official holdings of foreign securities rose the least since April. Japan is the biggest foreign holder of U.S. debt followed by China. Foreign central banks often purchase Treasuries and debt sold by U.S. government agencies such as Fannie Mae and Freddie Mac to invest the dollars received when selling currencies. The Bank of Japan, at the behest of the Ministry of Finance, hasn't sold its currency for dollars since March. Ten-year Treasury notes yields held near 4 percent on speculation surging crude oil prices will slow economic growth, prompting the Fed to slow the pace of interest-rate increases. Citigroup Inc., the world's biggest bank, cut its forecast for fourth-quarter economic growth to 3 percent from 4 percent, citing oil prices. Investors are the most bullish on Treasuries since the beginning of September, according to a survey by Ried, Thunberg & Co. It's a ``bull market'' in Treasuries and 10-year yields will probably drop below 4 percent this week, said Michael McGlone, an interest-rate futures analyst at a New York-based unit of ABN Amro Inc. More expensive oil is ``a drag on the economy; it's a monkey on our back.''