Bonds Edge Higher in Quiet Trading
NEW YORK (AP) _ U.S. Treasury prices edged higher Monday, holding on to gains made Friday on favorable employment data, amid uncertainty over future economic indicators.
The price of the benchmark 30-year Treasury bond rose 7/32 point, or $2.19 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 6.24 percent from 6.25 percent.
Bond markets were relatively quiet Monday following a rise on Friday, when investors responded favorably to a report showing only modest increases in wages _ a figure closely watched by economists for signs of inflation.
But trading was subdued amid uncertainty over how Tuesday’s report on productivity in the third quarter will turn out. Investors were also looking ahead to a report Friday on producer prices, another important inflation indicator. Bond investors fear inflation, which diminishes the value of their fixed-return investments.
In the broader market, prices of short-term Treasury securities were unchanged and intermediate maturities were up 1/16 point to 3/16 point, reported Bridge Telerate, a financial information service.
Yields on three-month Treasury bills were 5.19 percent as the discount fell 0.04 percentage point from late Friday to 5.05 percent. Six-month yields were 5.29 percent, as the discount rose 0.01 percentage point to 5.30 percent. One-year yields were 5.68 percent as the discount rose by 0.01 percentage point to 5..8 percent.
Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.
The federal funds rate, the interest on overnight loans between banks, rose to 5.50 percent from 5.38 percent late Friday.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 3/32 point to 109 19/32. The average yield to maturity was unchanged at 6.10 percent.