Monday, April 30, 2007

Bonds Rise Following Release Of Data On Inflation, Monday, April 30, 2007 9:15:18 AM

The release of key data on inflation caused buying in the first 45 minutes of Monday`s treasury market, sending bonds higher. A report showing that consumer income outpaced spending during March caused traders to move their money into fixed income investments. As bonds rose on Monday morning, treasury yields declined, reversing some of the gains made at the end of last week.

The 10-year yield opened lower on Monday and continued to slide throughout the first part of the day. The early buying took the 10-year yield to its lowest level since last Wednesday. Shortly after 9 am Eastern Time, the 10-year yield was down 4 basis points at 4.658%. Meanwhile, the 30-year and 5-year yields were down 3.6 and 4.6 basis points, respectively.

Monday morning, the Department of Commerce released its report on personal income and spending in the month of March, which showed that personal income rose 0.7% in March, matching an upwardly revised 0.7% increase in February. The increase came in modestly above economist estimates of a 0.5% increase. At the same time, personal spending rose 0.3% after an upwardly revised 0.7% increase in February. Economists expected personal spending to rise 0.5% compared to the 0.6% increase originally reported for the previous month.
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