Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: ild who wrote (63805)	9/29/2006 8:32:32 PM
From: RealMuLan	Respond to of 110194

Consumer Sentiment, Factory Reports Dampen Hopes For Interest-Rate Cuts BY REUTERS Posted 9/29/2006 investors.com U.S. Treasury debt prices fell on Friday amid worries that an anticipated Fed interest rate cut in early 2007 may be delayed after surprisingly upbeat manufacturing conditions and consumer confidence data. The National Association of Purchasing Managers-Chicago index, a key indicator of business conditions in the Midwest, jumped to 62.1 in September, beating economists' expectations for a reading of 56.0. The benchmark overnight federal funds rate stands at 5.25%. The U.S. central bank left interest rates unchanged in August and September, having tightened monetary policy 17 times since June 2004. The benchmark 10-year Treasury note was down 5/32 in price for a yield of 4.64%, from 4.62% late on Thursday. Bond yields move inversely to prices. Adding to the bearish sentiment were data from the University of Michigan showing consumer sentiment rose more than expected in the month. Treasuries have rallied since late June in anticipation of an interest rate cut in early 2007, given a sharply slowing economy and its dampening effect on inflation pressures. The rally has put the 10-year note on track for its best quarter since the second quarter of 2005, with the yield falling from 5.25% in late June. Analysts reckon Treasury prices will resume their upward trend this week if the September ISM non-manufacturing data and August pending home sales come in line with expectations. Earlier in the session, the market was unmoved by data showing core U.S. consumer prices, excluding food and energy costs, rose 0.2% in August, as expected. The reading is the Fed's preferred measure of price inflation. However, the data showed the year-on-year rate of nonfood, nonenergy inflation rose to 2.5%, the highest in more than 11 years and above the Fed's presumed comfort level of 1% to 2%. Two-year notes traded 2/32 lower in price for a yield of 4.70%, from 4.62% late on Thursday, while new five-year notes were yielding 4.59% after an auction on Thursday, when they were yielding 4.57%.