960401

Debt futures settle

with gains

CHICAGO: U.S. debt futures on Friday closed higher after languishing in three-week-old ranges all day.

"There is a whole lot of nothing going on," one bond futures floor source said in early pit dealings.

The only notable trade of the day was the sale of 2,500 June 1997 Eurodollar EDM7 93.50 put options by a major firm that had sold more than 25,000 of these puts.

December Eurodollars EDZ6 closed higher, but near the bottom of the day's range, while the bond futures floor, despite thin pit conditions, lacked the muscle to push June T-bonds USM6 to close at the key technical level of 110-10/32.

Even shorts scrambling to cover their positions at midsession failed to press interest above the 110-16/32 level, a three-week high settlement price.

A decline in the Commodity Research Bureau (CRB) index and the signing of a 1996 U.S. budget deal offered modest support, but most traders and analysts dismissed these two fundamental factors.

"The CRB is so volatile that you would really need to see the index down three percent or down four consecutive days before people would take notice," one bond floor trader said.

While some traders were surprised that the bond market failed to rally on a 1996 budget agreement, others noted that there were only six months left in fiscal year 1996 and that both sides still had to return to the negotiating table for the 1997 budget.

The bond market found little excuse to rise out of its three-week old rally, let alone rally out of those ranges. The 18-day moving average stands at 110-01/32 and the pivot point is at 109-24/32.

The quiet trade reflected nervousness ahead of next week's economic numbers.

At the end of pit trade, June T-bonds were up 10/32 at 110-09/32, 10-year notes were up 05/32 at 108-04/32, munibonds were up 10/32 at 112-12/32, December T-bills were up one basis point at 94.64 and Eurodollars were up one basis point at 94.10.-Reuter