Bonds Firm Up in Early Trading

The long bond's yield has ticked down a basis point in noncommittal year-end action.
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Such is it with the last few days of the year. The market drops a little one day, moves up a little the next day. Treasuries are slightly firmer today, with just two more sessions to go before year-end.

Lately the 30-year Treasury bond was up 6/32 to 95 19/32, dropping the yield 1 basis point to 6.46%. As it stands, the 30-year's yield is about 2 basis points lower than this year's closing high, reached

Thursday.

Today's only monthly economic release was the Conference Board's index of

leading economic indicators

, which rose 0.3% in November. Economists as polled by

Reuters

were expecting a 0.2% increase. October's figure, originally flat, was revised to a 0.1% gain. Rising stock prices, an increase in money supply and new orders for consumer goods accounted for the increase in November.

Tracker

GovPX

reported trading volume by 10 a.m. EST actually up 5.7% when compared with the average Wednesday during the past month.

The market was slightly higher coming into the U.S. opening due to a bit of strength in the Japanese market. Yields on 10-year Japanese government bonds fell to 1.665% from 1.675% overnight

Analysts already believe next week could be a harsh one for the bond market, with desks fully staffed and the market staring the

National Association of Purchasing Management's

December

index

and the December

employment report

in the face. Fear of

Fed

is still the dominant factor in the Treasury market right now, and it's only taking a break because of the holidays this week. The

fed funds futures

contract listed on the

Chicago Board of Trade

lately was fully pricing in a Feb. 2

Fed

rate hike to 5.75% from 5.5%.

"There is a slew of data around the corner and fundamentals still show economic strength," said a morning comment from traders at

Aubrey G. Lanston

.