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To: Defrocked who wrote (40768)	5/13/1999 3:50:00 PM
From: John Pitera	Respond to of 86076

some sellers will emerge at 5.70-72. couple of items on oil and Japan a move back to 5.60 would be back to the 50 dma and the downtrend from the early march, early and late april highs in the 30 yr yield. the Japanese rates are plummeting, and rates are down in Brazil that has supported the rally from 5.85. and hurt the yen here are a couple of items on Japan and oil...................... Dollar-yen resumed its push higher last night as Japanese interest rates continued to plummet. The yield on the benchmark 10-year fell 4.5 bp to 1.300%, while the MOF announced it would lower the interest rate it pays on funds borrowed from the postal insurance and public pension funds by 0.3% to 1.7%, effective May 9. The MOF takes the funds it borrows and lends them to state-run banks and public corporations at the same rate. News from the BOJ also weighed on the yen, as the Nikkei Quick News reported that policy board member Nakahara has once again indicated that the central bank should ease credit by increasing the supply of funds to the banking system and set a numerical target for money supply growth. Also weighing on the yen, were comments from Flemming Larson, deputy director of research at the IMF. Nikkei English News reported that Larson argued that the worst of Japan's recession may not be over yet. The euro is a tad higher in extremely quiet trading. Some support appears to have originated this morning from an Agence France Presse Report that a group of about 250 Yugoslav soldiers left Kosovo earlier today. However, a NATO spokesman suggested that today's reports were "insignificant. -------------------------------------------- Of some interest, was an article in this morning's FT, which reported that Ali Ibrahim Naimi, minister of petroleum and mineral resources for Saudi Arabia, has suggested that the country wants average oil prices to reach a range of $18 to $20 a barrel by the end of this year, and is encouraging discussions with other oil producers to ensure prices stabilize in this range. While Naimi backtracked from earlier threats that if the country's demands were not met, Saudi Arabia would simply flood the market with oil in an effort to take out higher cost producers, his comments today appear to express concern about the OPEC agreement, as he argued that "we have to take the initiative and convince others to cooperate and maintain the restraint to keep the stability of the market." The Saudi's have certainly lived up to their end of the bargain, as recent OPEC data revealed that they cut 1.15 mln barrels of oil per day, roughly 88% their promised reduction for April. As a whole, OPEC reported that its members achieved 82% of the oil output cuts promised, up from 73% in March. June crude is up a little over $0.08 in electronic trading this morning.