Market briefing --- Lori (slow)
After the bell --- Tom (slow)
>> tomorrow we get the march jobs report. wall street and washington will be poring over the numbers. bloomberg will have them for you at 8:30 a.m. economists looking for a gain of 190,000 in payrolls, thinking that unemployment held steady at 4.8%. the treasury action today -- when was the last time the 10-year hit that level, a week ago?
>> now it’s even higher.
>> tom keene is with us now and treasuries were lower.
>> treasuries on the move and it has the attention of every market out there, absolutely.
>> a big story again, tomorrow, the jobs report. but today, we’re talking about the dollar value. this is the hole in one.
>> this is a complex chart, the white line is a euro proxy. we use a deutschmark and to keep things simple, white line up means dollar stronger. dollar stronger, dollar weaker. here’s the recent strong dollar and what’s going on here. the red line is complex, it’s three months paper, 90-day paper. let’s take the u.s. three-month paper and subtract the german three-month paper. if it’s positive, it’s above the green line. this is a positive spread with u.s. rates higher, german rates lower and down here, the german rates are higher. what karl wineberg at high frequency economics says is you can use this when they cross the line at zero, which is par. what wineberg says is par, you can tell which way the dollar’s going. everybody is worried about a weak dollar―many strategists are worried about a weak dollar. wineberg believes in the strong dollar and you can see that, here we’re crossing par and we were down here and, surprise, weak dollar, german yields higher than u.s. yields and here we are crossing par again, u.s. yields higher, three-month paper higher, u.s. dollar strengthening. wineberg is adamant that until we see european rates higher, not thinking about it, not planning it, but until we actually see them higher, the u.s. dollar will remain strong.
>> if i’m not mistaken, i was previewing your report earlier today, we have a ways to go before we get to the par level, especially with the european rates.
>> a long, long way to go and the e.c.b. did not raise rates today, which clearly affects that three-month paper and what wineberg and others are saying is, yeah, the e.c.b. may plan to come up, there may be an expectation, the fed may continue to raise rates. they’re a long ways away. think of the japanese, how far away they are.
>> is the formula fool-proof?
>> you look at the long-term trends and i spoke to michael rosenberg of bloomberg foreign exchange and he said in terms of the long-term cycles, it’s not that it’s fool-proof, but it gets your attention. there are other moving parts out here which says you don’t sell the family jewels to bet on this. there are other moving parts that can get in the way.
>> i want to ask you about your choice of the german currency. is there a reason for that? is that a proxy for all the europe?
>> it’s not a fair proxy for all of europe but it’s the best we can did because the euro started in 1999 and if you want to go back before that, you need an alternative and after a lot of analysis, using the large nation of germany, their economy as a proxy works pretty well.
>> are you shorting euros?
>> am i shorting euros?
>> i have no holdings because i’m with bloomberg news.
>> that’s the right answer, bloomberg news editor-at-large, tom keene. there is still much more ahead tonight on this edition of bloomberg “after the bell.” you’ll want to stay with us. martha stewart spreads her wings. another retailer will hawk her―hock her goods, things like cable settings, cooks ware and items on a bridal registry.
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>> i’m mark crumpton with a world news update. court papers pointing a finger at president bush in a leak of classified information about iraq. the documents say vice president cheney’s former top aide, lewis “scooter” libby told prosecutors that the president ok’d the disclosure of iraq intelligence to reporters. there’s no indication that mr. bush or mr. cheney sanctioned the release of a c.i.a. agent’s identity. rudy giuliani says not a day goes by that he doesn’t think of a burning world trade center and the site of two people jumping from the skyscraper together, looking like they were holding hands. the former mayor’s testimony captivated jurors in zacharias moussaoui’s death penalty trial. moussaoui effected a look of boredom when prosecutors played video of victims falling to their deaths. president bush says he’s glad lawmakers are near a deal on immigration
