29 August 2001, 12:38 August U.S. Consumer Confidence was reported at a weak 114.3
prompting treasury yields to tumble and spread product to tighten. The
114.3 index reading was in direct contrast to the expectation for an
increase to 117.5 and the July reading of 116.3. U.S. Treasuries started
the day well bid as a holdover from very good buying by Far East
accounts in the overnight session. The surprise drop in consumer
confidence had the immediate effect of pushing treasuries to progressive
new intraday highs. Equities were distressed at the low confidence data
and began to move lower immediately. This gave the cash market an
enormous flight-to-quality bid which held throughout the session.
Treasuries came off their best levels in mid afternoon amidst chatter of
profit taking. Nevertheless, treasuries had a remarkably positive day
with yields ending lower across the curve.
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