AGL 40.01 Increased By ▲ 0.01 (0.03%)
AIRLINK 127.10 Increased By ▲ 0.06 (0.05%)
BOP 6.60 Decreased By ▼ -0.07 (-1.05%)
CNERGY 4.46 Decreased By ▼ -0.05 (-1.11%)
DCL 8.55 No Change ▼ 0.00 (0%)
DFML 41.65 Increased By ▲ 0.21 (0.51%)
DGKC 86.99 Increased By ▲ 0.14 (0.16%)
FCCL 32.17 Decreased By ▼ -0.11 (-0.34%)
FFBL 64.75 Decreased By ▼ -0.05 (-0.08%)
FFL 10.15 Decreased By ▼ -0.10 (-0.98%)
HUBC 109.31 Decreased By ▼ -0.26 (-0.24%)
HUMNL 14.66 Decreased By ▼ -0.02 (-0.14%)
KEL 5.12 Increased By ▲ 0.07 (1.39%)
KOSM 7.18 Decreased By ▼ -0.28 (-3.75%)
MLCF 41.25 Decreased By ▼ -0.13 (-0.31%)
NBP 59.95 Decreased By ▼ -0.46 (-0.76%)
OGDC 194.60 Increased By ▲ 4.50 (2.37%)
PAEL 28.15 Increased By ▲ 0.32 (1.15%)
PIBTL 7.77 Decreased By ▼ -0.06 (-0.77%)
PPL 151.50 Increased By ▲ 1.44 (0.96%)
PRL 26.48 Decreased By ▼ -0.40 (-1.49%)
PTC 16.00 Decreased By ▼ -0.07 (-0.44%)
SEARL 78.25 Decreased By ▼ -7.75 (-9.01%)
TELE 7.46 Decreased By ▼ -0.25 (-3.24%)
TOMCL 35.40 Decreased By ▼ -0.01 (-0.03%)
TPLP 8.24 Increased By ▲ 0.12 (1.48%)
TREET 16.00 Decreased By ▼ -0.41 (-2.5%)
TRG 52.70 Decreased By ▼ -0.59 (-1.11%)
UNITY 26.55 Increased By ▲ 0.39 (1.49%)
WTL 1.25 Decreased By ▼ -0.01 (-0.79%)
BR100 9,933 Increased By 49.4 (0.5%)
BR30 30,896 Increased By 295.7 (0.97%)
KSE100 93,891 Increased By 535.3 (0.57%)
KSE30 29,090 Increased By 158.9 (0.55%)

US Treasury debt prices fell on Tuesday as reinvigorated bond bulls appeared satiated by two weeks of buying, but analysts said lingering problems in the housing sector should continue to bolster the market.
Dealers said the collapse of two Bear Stearns hedge funds due to their dealings in sketchier subprime mortgages was preventing any wholesale exit from government bonds. "There will still be some defensive money put into the market, given the uncertainties in the mortgage arena," said John Spinello, Treasury bond strategist with Jefferies & Co.
Equities stabilised as traders seemed to push aside worries about the ripples from low-end mortgage investments, which have now begun to affect the highly-leverage hedge fund industry. Bonds were not too heavily under pressure, however. Benchmark 10-year notes retreated only 4/32 and were offering a yield of 5.11 percent, up two basis points on the day.
An auction of $18 billion in new two-year debt was relatively well received but had no effect on prices. The session's US economic data also had little impact. Both new home sales and consumer confidence proved weaker than expected. But the market paid little mind, its energy focused more keenly on what the Federal Reserve might say when it concludes a two-day monetary policy meeting on Thursday.
Before the Bear Stearns debacle, many believed rising economic growth around the world would allow the Fed to leave rates on hold for the foreseeable future, perhaps even signalling as much in the post-meeting statement.
But now that subprime woes are back in the headlines, investors are on the fence. Some think the underlying strength of the economy would help insulate the financial system from Bear Stearns' hedge fund travails. Others, like Bill Gross, the widely followed chief investment officer for Pacific Investment Management Co, see a very real risk of contagion.
This indecisiveness was reflected in futures markets, which were now pricing in about a 36 percent implied chance of a cut in benchmark short-term interest rates by year-end, a prospect that had been all but erased from the market's radar just two weeks ago.

Copyright Reuters, 2007

Comments

Comments are closed.