FUTURES A week of nervous trading

Press, 16 January 1988, Page 32

FUTURES A week of nervous trading

Thin volumes personified the Barclays contract last week.

Market participants are noting offshore bourses, Wall Street in particular, as well as displaying more nervousness as they anticipate further negative announcements from the business sector, said Mair Astley Futures. “In addition, the banking sector is showing some desire to reduce its exposure to share market participants. This in itself would dampen any enthusiasm to purchase N.Z. equities. The manager of Edgen Wignall Futures, Dr Brent Layton, said the BSI futures market drifted down from Wednesday, with futures maintaining a significant discount to the actual index. “The degree of the discount has encouraged some arbitrage dealing: selling shares and buying futures but over all the market has been lifeless,” Dr Layton said. Interest rates Dr Layton said interest rate futures prices traded in a narrow range over the last few days as traders await the December quarter CPI figure next week. “The level expected by

market participants ranges between the 1.5 and 2.6 per cent for the quarter. “Our pick for the figure is 1.5 to 2 per cent, so we see the result as likely to be mildly bullish for futures prices,” Dr Layton said. Quiet markets are prevailing on New Zealand Government stock and on the secondary stock market. Two major catalysts are waited for by participants. The first is the CPI figure for the December quarter, while the second is the success of Mr Douglas’s deficit funding for the year, Mair Astley said. Varying market perceptions of projected liquidity demands in the March quarter have seen the bank accepted bill futures price structure trade through a 50 point range. Market perception is that irrespective of tax flows and GST payments creating pressure on primary liquidity, term rates will stay firm as a means of dampening the demand for credit. Wool The wool futures price structure has been subjected to selling pressure. Market perceptions indicated that the

futures prices were at too great a premium over auction prices.

“This resulted in some speculative selling by participants. We see the March and May delivery months bottoming out at 600. We also suggest that there may be further downside in the far months,” Mair Astley said. U.S. dollar The kiwi continues to strengthen against the U.S. dollar and against the Australian dollar, said Mair Astley. “This would be more of a reflection of a weakening SUS, rather than N.Z. fundamentals — interest rates — in New Zealand,” Mair says. “The trade figures due for release in the U.S. on Friday (early Saturday N.Z. time) should spark another move in international currency markets. If the trade figures are good for the U.S., the greenback could rise. If bad, the greenback could tumble further.” However, the greenback has now been in a three year slide against major currencies, and the probability of it shortly bottoming out is possibly greater than a dramatic drop.

SUS CONTRACTS Contracts traded: nil. Open positions at January 14: Feb 246, Mar 42, total 288 (up 1). COMMERCIAL BILLS Contracts traded: nil. Open positions at January 14: Mar 1, Jun 10, total 11 (same). GOVERNMENT STOCK Mth Open H/L Last Vol Mar 8527 527/523 525 164 Contracts traded: 164. Open positions at January 14: Mar 1348, Jun 121, Sep 120, total 1589 (up 114). WOOL Mth Open H/L Last Vol Jan 612 612/612 612 23 Mar 615 619/611 619 42 May 640 644/633 637 34 Contracts traded: 99. Open positions at January 14: Jan 82, Mar 323, May 350, Aug 43, Oct 23, Dec 28, total 849 (down 5). 90-DAY BANK BILLS Mth Open H/L Last Vol Feb 8290 290/270 275 44 Mar 8295 295/278 278 25 Apr 8300 315/300 315 35 Dec 8500 500/500 500 1 Jun 8500 500/500 500 1 Contracts traded: 106. Open positions at January 14: Feb 344, Mar 483, Apr 5, Jun 218, Sep 185, Dec 179, Mar 31, Jun 16, Sep 5, total 1466 (up 27). SYDNEY ALL-ORDS (half-points omitted) Prev. Mth close H/L Last Vol

Mar 1220 241/226 1240 330 Contracts traded: 330. Open positions at January 14: Mar 4780, Jun 8, total 4788 tdown 45). " BARCLAY’S SHARE INDEX Mth Open H/L Last Vol Mar 1940 940/885 899 44 Jun 1970 970/928 928 6 Contracts traded: 50. Open positions at January 14: Mar 343, Jun 2, Sep 52, total 397 (up 3).

N.Z. FUTURES MARKET WEEK ENDED January 15. Trading Traded prices Total Open months This week To date this cont’s SUS High Low Last High Low week Jan ’88 1.5177 1.5152 1.5177 1.58881.5152 282 —— Feb ’88 1.5444 1.5270 1.5299 1.5444 1.5270 246 246 Mar '88 1.5442 1.5442 1.5442 1.67401.5442 40 42 Totals 568 288 PCP Mar '88 — — — 8500 7800. — 10 Jun ’88 — — — 8430 7815 — 1 Totals 0 11 GOVERNMENT STOCK Mar ’88 8527 8515 8525 8549 8390 1014 1348 Jun ’88 8548 8542 8548 8548 8400 3 121 Sep ’88 — — — 8565 8520 — 120 Totals 1017 1589 WOOL Jan ’88 630 610 612 750 541 82 82' Mar ’88 640 611 619 770 551 119 323 May ’88 675 632 637 780 575 108 350 Aug ’88 700 690 690 785 635 10 43 Oct ’88 705 700 700 735 735 2 23 Dec '88 710 700 700 789 745 6 28 Jan ’89 — — — 800 800 — 0 Totals 327 849 90-DAY BANK ACCEPTED BILLS Jan ’88 8290 8274 8280 8397 8040 78 — Feb ’88 8291 8265 8275 8399 8220 160 344 Mar ’88 8300 8278 8278 8450 8000 120 483 Apr ’88 8320 8300 8315 8320 8300 40 5 Jun ’88 8399 8330 8350 8430 8100 9 218 Sep ’88 8460 8355 8460 8480 8100 10 185 Dec ’88 8500 8500 8500 8500 8100 5 179 Mar ’89 8500 8499 8499 8500 8200 4 31 Jun '89 8500 8500 8500 8500 8320 5 16 Sep ’89 8500 8500 8500 8500 8470 4 5 Totals 435 1466 BARCLAY’S SHARE INDEX Mar ’88 1985 1885 1899 4290 1850 303 343 Jun ’88 2055 1928 1928 2055 1928 8 2 Sep '88 — — — — — — 52 Totals 311 397