Bonds Edge Higher

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Some days the Treasury market just does what it wants to.

Take Wednesday. Little bits of economic news and commentary kept wafting by, but traders seemed unexcited. The benchmark 30-year bond opened stronger in the morning after a good night in the overseas markets thanks to

Federal Reserve Chairman Alan Greenspan's

comments Tuesday night. His acknowledgment that Asian countries' recent woes could lead to deflation here was "music to the bond market's ears," said

First Chicago Capital Markets

economist Anthony Karydakis.

In a potential further boost to the bond market, whose worst enemy is inflation, the

Commerce Department's

new home sales

figure for October, released Wednesday morning, was down 1.7% from the September number. Economists surveyed predicted an increase averaging 1%.

But traders said neither Greenspan's comments nor the new home sales number was what pushed the long bond's price up, dropping its yield to 6.007%, the lowest in nearly two years, around noon. Instead, they said, it was the unwinding of a massive interest-rate hedge that lead underwriter

Salomon Smith Barney

had executed for

Southern California Edison

. The big electric utility issued $2.5 billion of corporate bonds Wednesday. To lock in an interest rate for the company, traders said, the dealer short-sold $1 billion of Treasuries, then pushed the market up by stepping in to buy them back around midday. Salomon didn't return a phone call.

If you wanted a referendum on the economy Wednesday, you weren't going to get one, billion-dollar hedge or no billion-dollar hedge. Like rain on Election Day, events on the horizon, starting with the

Labor Department's

release on Friday of the November payroll numbers, are keeping the voters at home. Add fear of fallout from the collapses in Asia, two afternoon speeches by Greenspan in Syracuse, N.Y., on Wednesday, and the fact that it's the end of the year, when investors want to protect their gains or cut their losses, and "nobody wants to step up and take a big view,'' said Fred Sturm, senior economist at

Fuji Securities

in Chicago. "Japanese buying willy-nilly or Japanese selling willy-nilly would be an impulse for people to jump on the trolley car, but they're not going to set the trolley car in motion themselves."

Wednesday's other main piece of economic news, the Fed's

Beige Book

, found evidence of dropping demand for exports and increased competition from imports, but the bond market responded to the anecdotal tome as it typically does, with a big old yawn. The benchmark 30-year bond's price closed up just 5/32, dropping its yield to 6.02%.

Thursday's numbers

(all times EST):

Mortgage Bankers Association Application Volume

indexes for the week ended Nov. 28 (sometime in the a.m.): The

Purchase Index

last stood at 224.1, while the

Refinance Index

was at 779.4.

Initial jobless claims

(8:30 a.m.): For the week ended Nov. 29, the consensus sees 314,000 claims, up from 303,000 last week.

Revised third-quarter

nonfarm productivity

(10 a.m.): The consensus sees a revision to 4.1%, down from a preliminary 4.5%.