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FUTURES & BONDS

INVESTOR'S BUSINESS DAILY

MONDAY, MAY 12, 2008

B17

Ten-Year Note Barely Rises, Other Bonds Finish Mixed After AIG Reports Huge Loss BY REUTERS

Treasuries mostly edged up Friday as resurgent credit worries sparked demand for safe-haven government bonds, propelling the benchmark 10-year note to its best week in nearly two months. Bonds gained on news late Thursday that American International Group, the world’s largest insurer, posted a record $7.8 billion quarterly loss. U.S. stock indexes also fell sharply. “Every time the (stock) market gets weak, you start to see that safehaven bid come back into play. AIG’s earnings were miserable, and that affected the financials,” said Joe Keetle, senior wealth manager at Dawson Wealth Management. The dismal AIG results fanned doubts about a recovery in credit markets. Other financial companies, including Swiss bank UBS and U.S. home-finance company Fannie Mae, have recently announced asset write-downs and credit losses stemming from subprime mortgages. Credit fears have dragged equity markets from their recent peaks, and benchmark 10-year Treasury yields from their four-month highs reached earlier last week. The benchmark 10-year note was yielding 3.77%, down from 3.78% late Thursday. Major U.S. stock indexes were down as much as 0.9% in the wake of a 2% drop in Tokyo and a 1% fall in Europe. Another positive factor for Treasurieswas the roughly $70billion investors received on maturing U.S. government bonds from the Treasury quarterly refunding last week. Investors plowed back some of this record amount of cash into Treasuries in anticipation of season-

ally strong performance after the May refunding, analysts said. Bond gains were mitigatedby a bigger-than-expected narrowing in the March trade deficit, boosting the prospects of an upward government revision on first-quarter gross domestic product, analysts said. A stronger first-quarter GDP read-

ing would support the view that the U.S. economyis steeringclear of a recession, alleviating pressure on the Federal Reserve to trim short-term interest rates further, analysts said. The two-year note dipped 1/32 in price for a 2.25% yield, from 2.23% late Thursday. The 30-year bond traded up 8/32 for a yield of 4.51%, vs. 4.55% late Thursday.

For Friday, May 9, 2008 Bonds Summary

Issues traded Advances Declines Unchanged

Domestic Fri Thu 4 4 2 3 1 0 1 1

All Issues Fri Thu 4 4 2 3 1 0 1 1

Key Financial Futures

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Money Rates

Federal Funds Market Rate: High 2.125 Low 2.00 Last 2.00 Rates on overnight loans among financial

Prime Rate: ...............................................5.00 institutions. Base interest rate charged by major U.S. commercial banks on loans to corporations.

Dealers Commercial Paper:

30 days ...........................................................2.62 60 days ...........................................................2.71 Primary ................................................................2.25 90 days ...........................................................2.76 Secondary.............................................................2.75 Discount rate for unsecured notes of top-credit corporations sold directly or through Rate charged by Federal Reserve System on dealers. loans to depository institutions

Discount Rate:

Broker Call Loan Rate: ...........................3.75 Rate charged on short-term loans to brokerage dealers backed by securities.

Bankers Acceptances: 30 60 90 120

FlourhardwinterKC cwt Coffeeparanaex–dock NYperlb. Coffee medlinex–dock NY perlb. Cocoabeans IvoryCoast$metricton Cocoabutter Africanstyl$met ton SugarNo. 11 cents perlb HogsSiouxFalls47–50 pct 220–270 lb Feedercattle500–600 lbOkl avcwt Porkbellies12–14 lbMidwest avcwt

Fri

(Secondary Market) Treasury Bill: 1 month ....................................................2.55-2.65 1-year, (as of May 5) ..................................1.93 3 months .................................................2.80-2.90 Annualized rate on weekly average basis, 6 months .................................................2.80-2.90 yield adjusted for constant maturity.

Thu WheatNo. 1 hard KC.

05/09 24.00 1.2928 1.4349 3054 7629 12.67 56.00 116.00 n.q.

05/08 OatsNo. 2 heavyorBetter 24.40 Cornoilcrude wet/drymill Chi.lb. 1.2767 SoybeanoilcrudeDecatur lb. 1.4159 Metals 3022 AluminumperlbLME 7540 CopperCathodefull plate 12.68 SilverHandy & Harman 54.50 Platinumpertroyoz. NY(contract) 116.00 PlatinumMerc spotper troyoz. n.q. Steelscrap No. 1 heavygrosston

6.12¼ 13.33 327.50

6.13¼ Londonmorningfixing 12.85 Londonafternoon fixing 324.20 NYHandy & Harman

6.84½ 12.28 7.84 4.01 .88½ .59½

7.02 12.03¼ 8.08 4.02½ .88½ .57

1290.00 3.8830 16.670 2008.00 2101.80 493.67

1289.00 3.8830 16.830 1969.00 2042.30 493.67

NYEngelhard NYMerc. spotmonth

878.14 884.50

off1.00 up3.90

Textiles & Fibers Cotton1–1–16in. strict low middling

61.75

61.18

3.6275 3.2805 3.0925 118.03 124.12 125.94 129.52 125.96

3.5025 3.2200 3.0150 116.33 120.59 123.65 127.10 123.69

Petroleum – Refined Products FueloilNo. 2 NY hbr bggl fob Gasolineunlprem RVPNY hbr bgglfob GasolineunlRVPNY hbr bggl fob Dubai$perbbl fob NorthSea Brent $perbbl fob WestTexas Intermed$perbbl fob LightLA Sweet$perbbl fob AlaskaNo. Slope del.West Coast

Raw Products

Gold

Grains CornNo. 2 yellowChi processorbid SoybeansNo. 1 yellow SoybeanMealCenIll 48pctprotein–ton

Eurodollar Rates:

WheatNo. 2 Chi soft WheatN.1 dk 14pc–proMpls.

Spot Prices Food

days ...........................................................2.60 days ...........................................................2.70 days ...........................................................2.65 days............................................................2.79

150 days ...........................................................2.83 Rates paid on dollar deposits outside the 180 days ...........................................................2.82 U.S. Discount rate on business credits backed and sold by banks to finance trade. London Interbank Offered Rate: 3 months ........................................................ 2.69 6 months ........................................................ 2.78 Certificates of Deposit: 1 months .........................................................2.63 1 year .............................................................. 2.87 The average of rates paid on dollar deposits. 3 months .........................................................2.78 6 months .........................................................2.93 Interest rate paid by dealers for certificates Treasury Bill Auction Results: 3-months (as of May 5) ...........................1.610 of deposit based on the duration of the 6-months (as of May 5) ...........................1.740 security. Average discount rate for Treasury bills in minimum units on $10,000.

887.25 876.00 876.00

11.29 11.32 up10.25 NaturalGasHenry Hub, $permmbtu off1.00 a–Asked,b–Bid, n–Normal, r–Revised,nq–Not Quoted, off1.00 n.a.–NotAvailable.

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