A Turbulent, Yet Flat, Morning for Bonds

The Treasury market is being pushed around by a number of factors this morning. Dealers have been buying ahead of the AT&T (T Quote) bond offering, which the company increased in size by $1 billion, to $8 billion. In addition, news that the U.S. was unable to reach an agreement with Yugoslavian President Slobodan Milosevic has caused knee-jerk buying in the short end of the Treasury curve.

Lately the 30-year Treasury bond was up 1/32 to 95 13/32, yielding 5.57%.

Wire services reported that U.S. negotiator Richard Holbrooke is leaving the Balkans, having failed to persuade Milosevic from continuing to attack Kosovo. NATO air strikes against Yugoslavia are expected. The 30-year bond traded off on this news, but the short end of the curve saw buying, partially due to the weakness in stocks. The Dow fell to its then-lowest levels on the day on this information. Lately the five-year bond was up 4/32, yielding 5.10%. ...