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Bonds Lie in Wait for Fed Speakers

The market has recovered from its early lows hit in reaction to a rate hike by the Bank of England.

Bonds are slightly higher this morning in listless trading. The market was pulled down overnight with the U.K. market after the

Bank of England

surprised by raising rates, but bonds have recovered from the morning low. Rather, the bond market seems to be waiting to hear what several


speakers have to say about the state of the economy later today, most importantly Fed Governor

Laurence Meyer


"There's not much trading right now," said Tony Crescenzi, chief bond market strategist at

Miller Tabak Hirsch

. "People are just waiting for the speeches. The market's in a more reactive mode, and it's not in the mood to do much before that."


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volume by 10 a.m. EDT was down 18% when compared to the average Wednesday last month, as just $15.1 billion in securities had changed hands. The 30-year Treasury bond was lately up 6/32 to trade at 100 26/32, as the yield dropped 1 basis point to 6.07%. At 8:11 a.m., the 30-year bond was down 10/32.

The Fed governor with the most potential to move the market today is Meyer, who speaks on the economy before the

Philadelphia Council for Business Economists

. Meyer's a hawk who's intensely concerned with rising wage costs, and the market's not expecting friendly words when he speaks at 1 p.m. EDT. Fed Chairman

Alan Greenspan

also speaks today, and despite the tendency for some in the market to play up his speech, it's not bloody likely that he'll move the markets. His 11:45 a.m. address is part of the

Lecture Series on the American Century

-- and he's commemorating the 25th anniversary of former President

Gerald Ford's


"Given the forum, I think it's unlikely he'll say anything about the market," said Crescenzi. "There is some room for him to talk about technology and the positive benefits it has had on the economy. If the market focuses on one or two lines, it could be a boost, but I think that would be an overreaction."

The Bank of England surprised the markets by raising the repo rate (its version of our fed funds target) to 5.25% from 5%. But Crescenzi pointed out that this rate hike has afflicted England's bond market more than other foreign markets. The 10-year Gilt spiked up 22 basis points to 5.51% from 5.29%, while the German Bund was up 9 basis points to 5.03% from 4.94%.