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To: Defrocked who wrote (37966)	5/3/1999 12:16:00 PM
From: John Pitera	Read Replies (2) \| Respond to of 86076

Def, what do you make of the 10 yr weakness vs. the 2 yr. IS it inflation expectations coupled with flight to quality which now, is not going to the longer end of the curve due to world growth and inflation concerns. Any flight to quality moves to the short -end where a rise in rates can not create a capital loss ?? very curious 09:40 ET: 307-739-0784 30-year: -13/32...5.691%.....GNMAs -4/32...96-25 The June T-bond recently dipped below the 120-00 level. We would expect initial support to hold at 119-29, which was the low following the release of the March unemployment report on 4/2. Further downside support is seen at 119-22, which represents the 2-month low on 4/1, though this level may be taken out quickly as a number of stops are rumored to lie in this area. 09:20 ET: 30-year: -4/32...5.671%.....GNMAs -3/32...96-26 The market remains extremely quiet ahead of the upcoming release of the March NAPM data. The 10s have once again been under heavy pressure, backing up 2.2 bp on the session. The 10-year note is now at its cheapest level on butterfly against the 2-year note and the bond since early November. However, sources we have spoken with expect the 10s to continue to underperform the 2s and the bond ahead of the May refunding. 08:35 ET: 30-year: -10/32...5.685%.....GNMAs -3/32...96-26 Personal Income rose 0.4% in March; the February increase was unrevised at 0.5%. Personal Consumption also rose 0.4% in March; February was revised up to 0.8% from 0.7%. The savings rate remained unchanged in March at -0.6%. These income/spending numbers were close to expectations and will have no market impact. The spending numbers had already been suggested by the Q1 GDP report, and income provided few surprises. This was one of the weaker income increases in recent months, but that was due to the aberrant 46K increase in March payrolls, which held wages/salaries to a small 0.3% increase.