Treasurys Steady In Tokyo; Focus On Fed Bernanke Speech

[gavinmccallister]

Treasurys Steady In Tokyo; Focus On Fed Bernanke Speech

02/14/2006 11:30 PM ET

U.S. Treasury prices were steady Wednesday in Tokyo with price movements mild as many players kept to the sidelines amid a lack of trading cues before testimony by Federal Reserve Chairman Ben Bernanke to Congress later in the global day, traders said.

"Prices didn't move much because players are waiting for Bernanke. He is expected to indicate that the Fed's rate hike mode will continue in March. This would be supportive for the dollar, weakening the yen," said Kazuaki Oh'e, executive director of debt capital markets at CIBC World Markets.

Some Japanese investors who appeared to have bought the dollar were also cited as buyers of bonds, albeit not heavily, on the basis of hopes that the yen could weaken, he said.

Another trader said that players may also focus on possible comments by Bernanke about the U.S. housing market, which has recently showed signs of slowing. He added that a weaker housing market could hurt consumer spending.

Apart from Bernanke, market players are waiting for industrial production data for January due out later today.

Economists expect a moderate 0.3% increase in January after a 0.6% gain in the prior month.

They are also awaiting the January producer price index due Friday.

Economists are expecting a 0.3% overall PPI increase in January following a large energy-led 0.9% increase in December, while the core is expected to have increased only 0.2% after a 0.1% rise in December.

COUPON ISSUE PRICE CHANGE YIELD

4 3/8% 2-year 99 13/32 Unchanged 4.68%

4 1/2% 3-year 99 17/32 Unchanged 4.66%

4 1/4% 5-year 98 16/32 Unchanged 4.59%

4 1/2% 10-year 99 5/32 Up 1/32 4.61%

4 1/2% 30-year 98 18/32 Up 2/32 4.59%

At the Chicago Board of Trade, the March bond futures contract was at 112 4/32, up 2/32 from the previous session. The eurodollar contract on the Singapore Exchange didn't trade.

-Edited by Shawn Schroter

Copyright © 2006 Nihon Keizai Shimbun America, Inc.


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