The selling in Treasuries today is sort of like a migraine -- not as bad as the first day, but bad enough to run through a bottle of non-aspirin pain reliever. Bonds are lower in lean dealings this morning, in what analysts are attributing to prolonged



Alan Greenspan's


testimony before a


committee yesterday. The selling pushed the 30-year Treasury bond's yield to 6% for the first time in almost two weeks.

Weakness in the dollar against the yen and other currencies is also contributing to the market's poor performance this morning. Lately the 30-year Treasury bond was down 10/32 to trade at 89 23/32, bumping the yield up by 3 basis points to 6.00% (5.996% to be exact).

"You're seeing some follow-through from yesterday," said Bill Hornbarger, fixed-income strategist at

A.G. Edwards

. "The dollar continues to trade a little weaker, and that's something that's been putting a little pressure on the Treasury markets."

The bond market sometimes re-evaluates its first reaction to important speeches, but as of yet the market hasn't pulled a bullish interpretation out of Greenspan's address. Many believed the market would not have to reckon with an increase in the fed funds target at the Fed's next meeting, Aug. 24. The funds rate was hiked to 5% from 4.75% at the Fed's last meeting June 30.

"I think the market was a little bit surprised by the tone of the remarks," said Hornbarger. "He went out of the way to say that the Fed's vigilant and the market got a little complacent with the neutral bias" the Fed adopted following raising rates in June.

Greenspan justified returning the Fed's bias, or predilection for moving rates one way or the other, back to neutral because the Fed "did not want to foster the impression that it was committed in short order to tighten further. Rather, it judged that it would need to evaluate the incoming data for more signs that further imbalances were likely to develop."

Dollar/yen was down 0.27 to 116.59 this morning, contributing to bond weakness. The recent yen strength isn't what Japanese officials want, because it makes exports more expensive and hurts that country's recovery. This morning, Taichi Sakaiya, head of Japan's

Economic Planning Agency

, said dollar/yen somewhere between 120 and 125 was optimum.

Today's low volume indicates that traders are getting ready to close up for the weekend. Tracker


reported volume down 11% when compared to the average Friday last month. Just $14.8 billion in securities had changed hands by 10 a.m. EDT (37% lower than the average third-quarter Friday last year, when government desks were trading more actively).