CREDIT : Bonds Remain in Narrow Range in Cautious Trading
Bond prices barely budged Friday in light trading that brokers attributed to lack of significant news and reluctance to buy or sell until more economic statistics are revealed later this month.
The Treasury’s key 30-year issue rose about $1.25 per $1,000 in face amount. Its yield, which moves inversely to price, eased to 8.43% from 8.44% on Thursday.
“It seemed pretty quiet around here today,” said Carol Stone, senior economist at Nomura Securities in New York. “I think people are waiting for some news they might learn next week.”
The Commerce Department is scheduled to report January factory orders Tuesday, revised fourth-quarter gross national product Thursday and the January consumer price index Friday.
Those statistics could provide further insight into whether the economy is heading into a recession, as some analysts fear, or is growing vigorously and possibly inciting inflation.
An economic slowdown would imply lower interest rates and likely help bond prices. Conversely, signs of inflation would imply higher interest rates and tend to depress bond prices.
In the secondary market for Treasury bonds, prices of short-term governments were unchanged, while intermediate and long-term maturities rose 1/8 point, the financial information service Telerate Inc. reported.
The movement of a point equals a change of $10 in the price of a bond with a $1,000 face value.
The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.04 to 113.31. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 0.42 to 1,184.74.
Among corporate bonds, industrials and utilities were unchanged to slightly higher in light trading.
Among tax-exempt municipal bonds, general obligations and revenue bonds both rose about point in extremely light trading.
Yields on three-month Treasury bills fell 1 point to 5.67%. Six-month bills fell 4 basis points to 5.95%, and one-year bills fell 1 basis point to 6.24%. A basis point is one-hundredth of a percentage point.
The federal funds rate, the interest on overnight loans between banks, traded at 6.688%, up from 6.675% on Thursday.
