FINANCIAL MARKETS : Credit : Bonds Prices Move Higher in Light Trading

Bond prices rose in very light trading Tuesday as many credit market participants sat out the session waiting for today’s release of U.S. trade figures for August.

The Treasury’s closely watched 30-year bond picked up 11/32 point, or about $3.45 for every $1,000 in face value. Its yield, which moves inversely from its price, slipped to 9.90% from 9.93% late Friday.

There was no domestic trading of Treasury bonds Monday because of the Columbus Day holiday.

Bond prices were helped Tuesday by an improvement in the dollar, said Elizabeth G. Reiners, a vice president for money-market research at the investment firm Dean Witter Reynolds.

Crucial Figures

Volume was light because “everyone’s waiting for the trade figures tomorrow (this) morning,” Reiners said.

Reiners said predictions of the August trade deficit ranged between $13.5 billion and $15.5 billion, with the consensus between $14 billion and $15 billion. In July, the deficit reached a record $16.5 billion.

The trade figures are crucial for financial markets because they are considered key to the fortunes of the dollar.

The Reagan Administration has supported a lower dollar as a way to cut the deficit because imports are more expensive and U.S. goods become cheaper overseas when the dollar is down.

If the trade figures are high, the dollar is expected to continue to drop, and bondholders will sell if they see the dollar sliding.

Bond markets do not want a lower dollar because it can lead to inflation and to credit-tightening by the Federal Reserve Board. Fed action will force interest rates upward, which in turn will cause bond prices to drop.

In the market for other Treasury issues, short-term maturities ranged 1/32 point to 1/8 point higher, intermediate bonds were 1/8 point to 5/32 point higher and 20-year issues rose 7/32 point, according to the investment firm Salomon Bros.

Up 7 Basis Points

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

In the Treasury bill market, yields on three-month issues rose 7 basis points to 6.77%. Yields on six-month bills were up 1 basis point to 7.28% and one-year bills fell 4 basis points to 7.54%. A basis point is one-hundredth of a percent.

The federal funds rate, the interest charged on overnight loans between banks, traded at 7.675%, up from 7.5%% late Friday.

In corporate bond trading, industrial and utility issues were up 1/8 point in light trading, Salomon Bros. said.

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