Bonds lost ground ahead of tomorrow's Presidential elections with the two candidates seen as likely to impact the market quite differently. "The market expects Bush to win and thinks that he'll spend the surplus more quickly than Gore," commented Gib Clark of Zions First National Bank. "They're looking for an excuse -- it's kind of difficult to believe that a Republican would spend more than a Democrat," he added.
Whoever wins, the market is expected to be volatile and unpredictable. "Nobody wants to hold a position -- there's no commitment here and its getting worse," said Clark.
A lessening of tension in the Middle East has removed much of the risk premium which had underpinned the bond market in the past couple of weeks. The feeling is that the market is fully priced and traders prefer to stay on the sidelines until the picture clears -- possibly in the next couple of days.
The benchmark 10-year
Treasury note fell 4/32 to 99 13/32, its yield up 1.7
basis points to 5.844%
Treasury bond was down 11/32 to 105 2/32, its yield up 2.3 basis points to 5.886%.
Chicago Board of Trade
, the December
Treasury futures contract fell 8/32 to 98 25/32.
Dow Jones Industrial Average closed with a 159-point gain while the tech- heavy
Nasdaq fell back with a loss of 35 points.
Apart from the election, the next two days also see Treasury refunding auctions. Tomorrow $12 billion of 5-year notes will be offered and on Wednesday, $8 billion of 10-year notes.
There were no new economic indicators today.
Currency and Commodities
The dollar rose against the yen and the euro. It lately was worth 107.45 yen, up from 106.99. The euro was worth $0.8616, down from $0.8671. For more on currencies, see
Crude oil for December delivery at the
New York Mercantile Exchange
rose to $33.00 per barrel from $32.86.
Bridge Commodity Research Bureau Index
rose to 223.98 from 223.59.
Gold for December delivery at the
rose to $266.0 per ounce from $264.60.