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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (18737)	7/2/1998 10:20:00 AM
From: IQBAL LATIF	Respond to of 50167

According to a Bloomsberg report 'U.S. bonds rose as the dollar rallied and a report showed job growth slowed in June, boosting optimism that Asia's economic woes are helping to curb U.S. growth and keep inflation at bay'. ''The backdrop for bonds remains good,'' said George Adell, a trader at Philadelphia-based Starboard Capital Markets, said before the report. ''The economy is going to fall off.'' The benchmark 30-year Treasury bond rose 17/32, or $5.31 per $1,000 bond, to 107 5/8, driving its yield down 4 basis points to 5.59 percent. That's just 2 basis points above the record low reached June 15. Bloombergs also reported that ' Bonds gained early on as the dollar climbed against the yen after Japan's plan to revive its struggling economy did little to bolster expectations for improvement any time soon. The dollar rose as high as 140.95 yen from 138.50 yen yesterday, making Treasuries more attractive to international investors who convert the securities' payments into their home currency'. ''The dollar screamed overnight and everybody put their money back into Treasuries -- hence lower yields,'' said Adell. Treasury securities got another boost after the Labor Department said the economy added 205,000 jobs in June, while the unemployment rate unexpectedly rose to 4.5 percent. Average hourly earnings, meantime, rose 0.1 percent, less than expected. Bloomberg reported that 'Slower Growth means Benchmark 30-year bond yields fell to 5.57 percent last month -- the lowest since the Treasury began regular sales of the securities in 1977 -- as problems in Asia and Japan made Treasuries attractive as a safe investment, and increased expectations for a slowdown in the U.S. Today's jobs report adds to recent evidence suggesting that the U.S. economy may be cooling form its robust 5.4 percent annual pace in the first three months of the year. The National Association of Purchasing Management yesterday said manufacturing put in its weakest performance in almost two years in June as the economic crisis in Asia took its toll on exports and a strike against General Motors Corp. shuttered vehicle plants. Some investors say further gains in bonds are justified because inflation is tame and will probably stay that way as the economy slows. Consumer prices rose just 1.7 percent in the 12 months ended in May. At a policy meeting that ended yesterday, the Federal Reserve left its target for overnight lending between banks unchanged at 5.5 percent, where it was set in March 1997, a sign central bank officials expect Asia's economic slump will curb U.S. growth and keep inflation at bay'.