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Bonds Bide Time Ahead of Economic Data

Traders are also wary ahead of heavy corporate supply due in September.

Treasuries have eased slightly in the early, meandering hours of today's trading session. The selling is partially motivated by anticipation of heavy corporate supply in September and worry over several important economic releases later this week. But all of these events are happening later, so today has been mostly a day of watching and waiting -- and waiting.

"The market is mostly marking time ahead of tomorrow's news, Wednesday's and Friday's," said Tony Crescenzi, chief bond market strategist at

Miller Tabak Hirsch


Of late, the 30-year Treasury bond was down 7/32 to trade at 101 28/32. The yield rose 2 basis points to 5.99%. The market's been inclined to decline since



Alan Greenspan

on Friday

addressed the issue of what role the stock market plays in monetary policy. Greenspan didn't give the markets an earthshaking sound bite (whether stocks rally isn't necessarily something they care about, but he said it matters in that it plays a part in consumer spending, fueling demand). But his words have weighed on a Treasury market that was of the mind that the Fed was done hiking rates for the year. The Fed raised the fed funds rate to 5.25% from 5% last Tuesday.

"The market is dealing with the risks of strong data, and still feeling the fallout from Greenspan," said Crescenzi. "I think he showed an intent to affect the markets just by bringing up the subject of stocks."

In addition,

Goldman Sachs

chief investment strategist Abby Joseph Cohen predicted this weekend on

Face the Nation

that the Fed will raise interest rates again, at the next committee meeting Oct. 5.

Whether she's right is going to depend on data, of course. Today's only economic release was the

new homes sales

report, which showed that housing isn't crumbling under the weight of higher interest rates. Sales rose to 980,000 on a seasonally adjusted annual basis in July, the second-highest annual rate ever recorded after November 1998's 985,000 rate. In addition, June's figure was revised upward to 979,000 from 929,000, making it the third-fastest sales rate ever.

Tomorrow the

Chicago Purchasing Managers' Index

, a survey of manufacturing sentiment in the Midwest, will be released. It's often considered a good read on the strength of manufacturing, and also a good predictor of the

National Association of Purchasing Management's

similar nationwide index, to be released Wednesday. Both indices have read above 50 for the last six months (indicating growth in the sector). Friday, the August

employment report

, the grand high llama of all economic reports, will be released.

The market's expecting a bevy of corporate deals to be sold in September. Corporate treasurers, realizing investors are going to be averse to taking on added risk as Y2K approaches, may regard this month as one of the best last chances to sell debt before the end of the year. And with another Fed rate hike still not out of the question, they may try to tap the market for funds before interest rates rise further.

Large companies planning to sell debt this week include



, bringing $1.5 billion, and

U.S. West


, with $1 billion.