Market Commentary

[Adam in CO]

Treasuries were little changed after a government report showed price increases of goods imported into the U.S. exceeded economists' forecasts while separate data indicated initial jobless claims declined.

Two-year notes fell the most in more than a month yesterday after the Federal Reserve said inflation is its primary concern and kept the U.S. benchmark interest rate at 5.25 percent for a seventh meeting.

Prices of U.S. imports rose 1.3 percent last month, after gaining a revised 1.5 percent in March. The data reported by the Labor Department in Washington was more than the 1 percent gain predicted in the median forecast of 50 economists surveyed by Bloomberg News.

The yield on the benchmark 10-year note fell almost 1 basis point, or 0.01 percentage point, to 4.66 percent at 8:38 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 4 1/2 percent security maturing in May 2017 rose 2/32, or 63 cents per $1,000 face ! value, to 98 3/4. Yields move inversely to prices.

A separate Labor Department report showed initial jobless claims totaled 297,000 in the week ending May 5, from a revised 306,000 during the previous period. The median estimate of 45 economists surveyed by Bloomberg News was for 315,000.

The Commerce Department reported that the U.S. trade deficit, the difference between imports and exports, widened in March to $63.9 billion from a revised $57.9 billion during February. The median forecast in a Bloomberg survey of 78 analysts was for a gap of $60 billion.

The government will auction $5 billion of 30-year bonds today with bids due by 1 p.m. Washington time. It is the last of three sales this week. The Treasury sold $14 billion of three- year notes on May 7 in the last offering of that maturity, and $13 billion of 10-year securities May 8.

[bparker]

So we are in a financial wreck and our govt is selling off bonds because their broke?

[Adam in CO]

We should all move in w/ Dennis.