FINANCIAL MARKETS : Credit : Bonds Unchanged as Traders Await U.S. Data

Bond prices were flat Monday, reflecting reluctance of traders to speculate on the direction of interest rates before the release of government economic reports at the end of the week.

The Treasury’s key 30-year bond finished unchanged, while its yield remained at 9.11%.

The Commerce Department on Thursday will reveal figures on March retail sales. Government reports are scheduled for Friday on the merchandise trade deficit for February, wholesale prices for March, industrial production and factory use for March, and business inventories for February.

These numbers could provide important insights into the direction of the economy, the level of inflation and whether the Federal Reserve will tighten or relax credit policy.

Corporate Prices Up a Little

“The market is pretty much gearing itself for the numbers at the end of the week,” said Peter Hegel, first vice president in charge of mutual fund trading at Van Kampen Merritt Inc. in Lisle, Ill.

In the secondary market for Treasury bonds, prices of short- and intermediate-term government securities were unchanged to 3/32 lower and long-term issues were unchanged to 1/16 point higher, the Telerate Inc. financial reporting service said.

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

The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 0.23 to 1,120.84.

In corporate trading, prices rose marginally. Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, increased 0.36 to 299.45.

In the tax-exempt market, municipal bond prices were little changed. The Bond Buyer index was not available late Monday.

Fed Funds Rate Rises

Yields on three-month Treasury bills fell to 9.03% as the discount fell 7 basis points to 8.73%. Yields on six-month bills rose 3 basis points as the discount rose to 8.78%. Yields on one-year bills were unchanged at 9.50% and the discount stayed at 8.75%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, paid at maturity.

The federal funds rate, the interest on overnight loans between banks, traded at 9.813%, up from 9.75% late Friday.

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