CREDIT : Futures Prices Fall, Triggering Rise in Bonds

Bond prices finished mostly higher Monday, drawing support from a steep fall in commodity prices.

The Treasury’s closely watched 30-year bond advanced about 5/16 point, or $3 for every $1,000 in face value. Its yield, which moves inversely to its price and is often an indicator of interest rate trends, fell to 9.16% from 9.19% late Friday.

Most short-term issues, on the other hand, were unchanged to slightly lower.

Analysts said bond values got a lift from steep declines in prices of soybeans, corn, gold and oil. Falling commodity prices tend to ease investors’ concern about inflation, which erodes the value of fixed-income investments such as bonds.

Mixed Market

Market watchers said the rise in bond prices was limited, however, by nervousness about an upcoming government report on gross national product for the second quarter, due to be released on Wednesday.

In the secondary market for Treasury bonds, prices of short-term government issues finished 1/32 point lower to 1/32 point higher. Intermediate maturities rose 1/32 point to point, and 20-year issues gained 13/32 point.

The Shearson Lehman daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, was up 1.05 at 1,138.77.

Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, edged up 0.44 to 282.46.

Three-month Treasury bills, meanwhile, rose 5 basis points to a discounted rate of 6.79% and a yield of 7.00%. Six-month bills rose 6 basis points to a discounted rate of 7.08% and a yield of 7.43%, while one-year bills rose 2 basis points to 7.25% to yield 7.75%.

The federal funds rate, the interest on overnight loans between banks, was quoted late in the day at 7.813%, unchanged from late Friday.

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