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Rubin's Work Was Done, Bond Investors Say

With the administration on its last legs and the global economy on the mend, he picked the right time to leave, analysts are saying.

The relatively mild reaction in the bond market to the

news that



Robert Rubin

will announce his resignation today is a function of at least three things, analysts say: That a Rubin resignation has been rumored for years, that the


administration is winding down anyway and that the emerging-market financial crisis is widely perceived to have lifted.

"The fact that he's resigning has been on-again, off-again for the last three years," said Marcello Frustaci, senior vice president at

Daiwa Securities America

. "The market's been expecting it. They've been paving the way for this for a while."

But as important is the fact that the Clinton administration's work -- on both the domestic and the international fronts -- is largely done, said Tony Crescenzi, chief bond market strategist at

Miller Tabak Hirsch


"Given the lack of need for influence, he's choosing the right time," Crescenzi said. "There's nothing to do."

With just seven months remaining until another presidential election year is rung in, "the administration has nothing left in its bag," the strategist said. "The important fiscal work is already done -- the budget deficit is gone." When Clinton took office in 1993, the budget deficit exceeded $250 billion. In fiscal 1998, which ended last Sept. 30, the federal government logged a $70 billion surplus.

The only major item still on the administration's plate is a deal to bring China into the

World Trade Organization

, to which the remaining obstacles are "largely political, and the Treasury secretary can't influence that," the strategist said.

Meanwhile, as evidenced by rising bond yields over the last seven months, investors are broadly convinced that the global economy is firmly on the mend. "The market's just glad he hung on this long," Crescenzi said. "If he'd left last fall that would have been a different story. But the world has emerged from crisis and he's chosen just the right time."

After briefly selling off on the news, the bond market was lately trading up slightly. The benchmark 30-year Treasury bond, which saw its yield rise as high as 5.88% after the announcement, was lately up 6/32 at 91 30/32, its yield down 3 basis points at 5.82%.

The news comes on a day when Treasury traders are preoccupied with the quarterly refunding, the Treasury's auction of new long-dated paper. The spring refunding, which includes only 5- and 10-year notes, concludes today with the sale of $12 billion 10-year notes. Bids are due at 1 p.m. EDT and the results will be announced around 1:30 p.m.

There are no market-moving economic releases today. Traders are gearing up for two key inflation reports on Thursday and Friday -- the April



Consumer Price Indices