Pure l'alpin è sparito...bello vivace sto 3d. A lunedi
U.S. Treasuries up on mild wage gains
Fri Oct 28, 2005 11:18 AM ET
(Adds details on consumer sentiment, core PCE, comments; updates prices)
NEW YORK, Oct 28 (Reuters) - U.S. Treasury debt prices crept up in quiet trading on Friday on data showing restrained third-quarter wage gains, which overshadowed a stronger-than-expected rise in economic growth.
Analysts said the data suggest the Federal Reserve has leeway to raise interest rates gradually to fight inflation.
"The most important data for the market these days is inflation-related, and the employment cost index data was milder than expected," said Alan De Rose, a bond trader at CIBC Markets.
Trade was surprisingly quiet considering the data, and some analysts said this was because the market is taking a bit of a breather after several sessions of hard selling that helped push yields on benchmark notes to seven-month highs.
"Excuse me, could you tell me if the bond market is open today?" said Andrew Brenner, head of fixed income at Investec U.S.
Bonds ticked lower after the strong gross domestic product data. But traders said prices then turned higher as players focused on how mild the various inflation measures were, particularly for the job market.
Benchmark 10-year notes (US10YT=RR: Quote, Profile, Research) rose 2/32 for a yield of 4.54 after ending on Thursday at 4.55 percent. Selling early in the week, much related to mortgage hedging, pushed yields to a high of 4.605 percent.
Two-year notes (US2YT=RR: Quote, Profile, Research) were steady to yield 4.35 percent, unchanged from Thursday.
Five-year notes (US5YT=RR: Quote, Profile, Research) were up 1/32 to yield 4.42 percent, from 4.43 percent on Thursday, while 30-year bonds (US30YT=RR: Quote, Profile, Research) ticked up 4/32 to yield 4.76 percent from 4.77 percent on Thursday.
The third-quarter employment cost index came in as expected at plus 0.8 percent. But on an inflation-adjusted basis, third-quarter, 12-month wages and salaries fell 2.3 percent, the largest drop on record.
GDP in the July-to-September quarter grew 3.8 percent, above economists' median expectation of 3.6 percent.
Strategists also pointed to diminishing core inflation readings in the GDP data, and some said those data were also part of the bond market's turn higher.
The government said the core PCE, or personal consumption expenditures index, rose 1.3 percent in the third quarter versus the second. That was below the 1.7 percent increase at the end of the second quarter.
Also, the year-on-year PCE measurement in the third quarter dipped to 1.9 percent from a 2.0 percent year-on-year reading at the end of the second quarter.
Taken together, the data painted a picture of an economy still growing solidly after the destruction wrought by recent hurricanes but without much of the inflation many Fed officials have been warning about in recent speeches.
"The third-quarter GDP was perhaps on the strong side and that will encourage the Fed on its current track of measured monetary tightening. But it will not prompt the Fed to accelerate the rate of tightening," said Pierre Ellis, senior economist at Decision Economics in New York. "Growth and inflation are quite well balanced."
The market mustered no response to data showing consumer sentiment remained depressed after taking a severe hit in the wake of Hurricane Katrina.
The University of Michigan's final October survey came in at 74.2, below economists' expectations of a 76.4 result and September's 76.9 reading.
"It's a net plus for Treasuries. It shows absolutely no post-Katrina rebound, and it's the lowest since the end of 1992. So, it'll get some attention, but just not right now," said John Canavan, a bond market analyst with Stone & McCarthy Research Associates in Princeton, New Jersey.
Canavan was among those who reckoned the market's overall calmness reflected a technical fatigue after all the selling earlier in the week and over the past two months.
- è la peggior valuta del mondo oggi...
