Tuesday: Week Starts Slowly on Data Front

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By John J. Edwards III
Staff Reporter

With the sound of silence heralding the day before a holiday weekend, Friday saw bonds edge higher as traders squared positions ahead of the break. The yield on the bellwether 30-year Treasury eased 0.003%, essentially standing still at 6.98%.

"Going into

Friday there was no significant economic news, and going into a long weekend no one really wants to take a major position," said Sung Won Sohn, chief economist at

Norwest

in Minneapolis. "We were expecting range-bound trading, and that's what we had."

With other observers pointing to currency-related unwinding to explain the bond market's weakness this week, Sohn said a key factor was the static interest-rate position the

Federal Reserve

took at its Tuesday meeting. "After the initial euphoria, the market decided that Chairman

Greenspan

is not finished raising interest rates," Sohn said. "More hikes are yet to come, so that, I think, creates some fear and uncertainty in the bond market."

The next working week will begin slowly as far as economic data are concerned, with no real excitement until the Wednesday report on April

durable goods orders

. Sohn expects those orders to tick up 1%, less than the consensus view of 2.9%. He said strength in aircraft orders will be offset by sluggishness in automobiles and household appliances.

Tuesday's numbers

(all times EDT):

Consumer Confidence Index

(10 a.m.): The

Conference Board

releases its measure for May. The consensus median estimate is 117.3, compared with 116.8 in April.

Existing home sales

(10 a.m.): For April. The consensus calls for a 1.5% decline, compared with a 2.3% drop in March.

Treasury auctions

(1 p.m.): $15.0 billion in three- and six-month bills; $20.502 billion maturing. At 2:30 p.m., Treasury announces three- and six-month bill auctions.

LJR/Redbook

(2:55 p.m.): Measuring retail sales for the week ended Saturday.