Bond Prices Are Little Changed In Slow Trading As Investors Brace for January Employment Data
NEW YORK -- Bond prices were little changed in subdued trading yesterday as investors braced for the government's latest report this morning on employment.</br></br>The employment data for January are likely to prompt the Federal Reserve Board to push interest rates higher in an attempt to cool the fast-growing economy, many analysts and investors say. The report is expected to show that non-farm employment grew a strong 292,000, while the civilian unemployment rate held steady at 5.3% last month, according to the average estimate of 12 economists surveyed by Dow Jones Capital Markets Report.</br></br>If employment growth is as robust as economists expect, it would put pressure on the Federal Open Market Committee to tighten monetary policy when the Fed policy-making body meets Tuesday and Wednesday, analysts said.</br></br>The report is likely to lead to a "volatile and erratic day," of trading, said Robert Falconer, a senior vice president in bond trading at CRT Government Securites Ltd. here. "There is a strong likelihood that we will see a lot of selling."</br></br>The data might also be used as a guiding light for finance ministers and central bank chiefs of the Group of Seven leading industrial nations -- the U.S., Britain, Japan, West Germany, France, Canada and Italy. They will be meeting in Washington today to discuss the prospects for reducing the U.S. budget deficit and for maintaining stable currency rates.