US Treasuries rise as labor costs revised downward
Tue Dec 6, 2005
NEW YORK, Dec 6 (Reuters) - U.S. Treasury debt prices rose on Tuesday after downward revisions to second- and third-quarter unit labor costs took away some of the urgency to the Federal Reserve's plan to control inflation with rate hikes.
Prices also moved higher after October data on pending home sales came in weak, fueling views in the bond market that the real estate market may be softening.
Benchmark 10-year Treasury notes rose 17/32 in price for a yield of 4.51 percent, versus 4.57 percent on Monday.
Unit labor costs, an important measure of inflation in the job market, fell in the third quarter by 1 percent, compared with economists' expectations of a negative 0.8 percent result and an initial reading of negative 0.5 percent.
Inflation erodes the value of fixed-income investments, so any sign it is easing attracts bond buying and takes the edge off a market bracing for official rate increases from the Fed.
The Federal Reserve's policy-setting committee meets next week and is expected to raise overnight lending rates another 1/4 point. But analysts say they are bracing for a possible change in the Fed's post-meeting statement to indicate a shift in the rate outlook after what would be a 13th consecutive rate increase.
Second-quarter revisions of unit labor costs were more striking than those in the third quarter, with the result coming in at negative 1.2 percent versus the previous reading of positive 1.8 percent.
"The data will tend to reduce some inflation fears and is a definite solid positive for the bond market since it will at least limit one source of inflationary concern from the Fed," said Alan Ruskin, research director at 4CAST Ltd. in New York.
Two-year notes traded 3/32 higher to yield 4.41 percent, compared with 4.47 percent on Monday.
Five-year notes added 9/32 for a yield of 4.43 percent, compared with 4.50 percent on Monday.
The 30-year bond rose 31/32 to yield 4.70 percent, versus 4.76 percent late on Monday.
Still, analysts cautioned not to read too much into the price movements, saying participation was already becoming lighter as Wall Streeters turn their attention to year-end bonuses. Light participation tends to cause exaggerated price swings.
The "pending home sales" indicator from the National Association of Realtors slipped to 123.8 in October -- down 3.2 percent from September and 3.3 percent year-on-year -- pointing to a modest slowing in national housing markets.
Bond prices often move higher on signs of economic weakness, whether in real estate or elsewhere, because fixed-income assets hold their value better in times of uncertainty.
"If there's anything the bulls are hanging their hat on here, it's the real estate market. But I think that's a tenuous case. After all, some of the data has been soft, and some has not," said one trader at a primary dealer on Wall Street.
Last week, for example, data showed existing home sales fell 2.7 percent in October, while new home sales soared 13 percent in the same month.
The market did not react to October factory orders data that came in higher and almost exactly as economists had expected.
Factory orders, including revisions to closely watched durable goods orders, rose 2.2 percent in the month, the government said, as expected. It also revised the September decline to negative 1.4 percent from negative 1.7 percent.
Other data on Tuesday showed chain store sales falling in the most recent week, amid views consumers were taking a break after the busy post-Thanksgiving period before plunging back into the shopping-mall fray in the run up to Christmas day.
dai che sale tutto e prima o poi nelle rotazioni settoriale ti trovi al giro giusto 
) tutto diventa .... 
- Fleur, Ditro, dove siete finiti? Beh, forse Fleur sta inzuppando le cime di rapa nel cappuccio 
