Commodities : Tuesday, Aug. 26, 1986 : Interest Rated Futures Rise

Interest rate futures prices advanced strongly on speculation that the central banks of major industrial nations may soon cut their lending rates to help stabilize the dollar.

Treasury bond futures gained as much as 15/32 points at the Chicago Board of Trade.

In some other markets, pork futures were sharply higher, soybeans were up slightly while the grains declined and energy futures moved higher.

The speculation in the financial markets was that the central banks of Japan and West Germany will move to cut primary interest rates, said Gary Dorsch, senior money market analyst with G. H. Miller in Chicago.

“There’s probably a better chance that Japan will cut its rate, and less of a chance for Germany,” he said.

“But when you examine the flow of capital between the United States and other industrial countries,” Dorsch said, “the most important lender of capital is the Japanese. So if they cut their rate, it will make U.S. investments more attractive.”

Also helping interest rate futures, he said, was the cut in the prime rate by most major banks.