FUTURES Bears still dominant in interest contracts

Press, 26 July 1986, Page 28

FUTURES Bears still dominant in interest contracts

The quake in the Australian dollar gave one of the few new factors for New Zealand futures speculators this week. The market otherwise was quiet as speculators settled in to wait for the Budget

The volume of interest rate futures traded was moderate and interest rates were still trading within the range set in recent weeks, said Miss Jenny Chin, of Marshall Futures.

August Government stock futures traded between 8320 and 8348, ending the week near their lows.

Bearish feelings for in-terest-rate futures because of expected tight liquidity at the end of the month, and the belief of some that the next stock tender might not be so well bld reflected in futures as prices moved down to 8330 early in the week.

Rumours of renewed offshore buying in stock in the middle of the week put a mild bullish feeling into the market, and futures moved up to 8348. Mr McDonnell, of Mair Astley, said that range trading had been the feature of the week in the Government stock contracts. There was stubborn resistance at 8340, until the level was pierced on Thursday but even then there appeared to be a reluctance for five-year rates to exceed 16.70.

“The conjecture now is that offshore investors will con-

sider New Zealand ahead of Australia, and accordingly support the next round of stock tenders.” This would put a ceiling on five-year rates, Mr McDonnell said. In 90 day commercial-bills futures (PCPs), rates showed a reluctance to exceed 17 per cent SUS futures The kiwi dollar opened on Monday around 5U50.5370, up 25 points on the previous Friday’s close, and was taken up sharply to 5430 on Tuesday morning but settled for most of the day between $U50.5380 and $U50.5390 closing above $U50.5400 in a late afternoon flurry, said Miss Jenny Chin, of Marshall Futures. The sudden rise may have been partly caused by a weaker U.S. dollar early in the week. A rebound in the U.S. dollar and the sharp fall in the Australian dollar later in the week saw the kiwi dollar easing to $U50.5370 and then suddenly fall to $U50.5300 when the Australian dollar tumbled to SUSO.6OBO on Thursday. The kiwi dollar rebounded late on Thursday, and settled on Friday between $U50.5310 5U50.5335. American-dollar futures traded between 1.8520 and 1.8860.

All eyes this week were on the demise of the Australian dollar with conjecture that it

would take the kiwi dollar with it, said Mr Geoff McDonnell, of Mair Astley Futures. “However, the sentiment is that N.Z. is benefiting from the consistency of the application of Rogernomics, as against the inconsistency of Australian economic statements, with the results that offshore sentiments view N.Z. favourably. “We feel that this can only provide support for the kiwi dollar, which reinforces our view that $U50.5300 on the foreign-exchange market is in the short term the bottom of the kiwi dollar’s range.”’ Wool

Mr Guy Spooner, of Marshall Futures, said wool-con-tract prices traded in a narrow range this week, with movements in most months limited to 6c' ($l5O a contract). At the first wool sale of the season, in Wellington on Thursday, prices were generally firm compared with the last selling season. Futures had already anticipated this firm physical market earlier in the week with traded prices generally 5c firmer than the previous week’s close. “We expect auction prices to rise over the next four to six weeks.” His advice is to sell in this rise. Wheat Wheat futures were again quiet this week, said Mr Spooner, of Marshall’s. All trading was between $210,000 and $212,000 a tonne for delivery in February, March, and May of next year. “There has been little direction this week from both offshore markets and New Zealand mills. We still expect more encouraging participation from all sectors of the market, as we approach deregulation of the wheat industry in February.” Details of yesterday’s sales: SUS CONTRACTS Mtli Open H/L Last Vol Aug 1.8830 1.8860/790 .8860 8 Contracts traded: 8

Open positions at July 24: Aug 264, Sep 5, Dec 1, total 270 (up 11).

COMMERCIAL BILLS Mth Open H/L Last Vol Aug 8320 325/316 320 36 Sep 8315 315/315 315 50 Dec 8375 375/375 375 4 Contracts traded: 90 Open positions at July 24: Aug 549, Sep 536, Oct 10, Dec 514, Mar 390, Jun 118, Sep 48, Dec 45, Mar 47, Jun 10, total 2267 (up 35). GOVERNMENT STOCK Mth Open H/L Last Vol Aug 8338 339/322 326 236 Sep 8339 339/324 326 55 Oct 8337 337/328 330 11 Dec 8346 346/342 342 3 Mar 8350 350/350 350 2 Contracts traded: 307 - Open positions at July 24: Aug 657, Sept 175, Oct 19. Dec 51, total 902 (up 11). WOOL FUTURES Mth Open H/L Last Vol Aug 527 527/527 527 1 Dec 523 526/523 526 5 Jan 524 526/524 526 8 Dec 543 543/543 543 1 JAn 547 547/547 547 1 Contracts traded: 16 Open positions at July 24: Aug 98, Oct 225, Dec 241, Jan 278, Mar 427, May 355, Aug 256. Oct 201, Dec 65, Jan 41, total 2187 (up 11). WHEAT There were no trades in wheat futures yesterday. Open positions at July 24: Feb 15, Mar 30, May 20, total 65 (up 1). . •