National Bank heavy seller

Press, 11 July 1989, Page 29

National Bank heavy seller

The National Bank, at odds with the Reserve Bank on interest rates, sold interestrate futures heavily late on Friday and yesterday. The bank’s heavy selling helped to make a big day on the futures market yesterday, more than 1500 lots of Government stock futures changing hands. The selling put pressure on Government stock futures prices, said Dr Brent Layton, managing director of Egien Wignall and Company Fu-

tures. Interest-rate futures move in the opposite direction to physical market rates, and there is a link between the two markets. Dr Layton confirmed that the fall in interest rate futures would have caused physical interest rates (in Government stock) to be slightly higher than otherwise. The link would be caused by those in the physical market putting funds instead into

the futures market, where they could hold “synthetic" stock. Cali rates were 14.02% late yesterday compared with 14% late on Friday,. 90-day rates were 13.85% compared with 13.3%, and November, 1993, Government stock was 13.11% compared with 13.12%. Barclays share-index fu-

tures had a strong day. They opened at 1972 after closing at 1942 on Friday, and moved up. The physical market was up 16 points, but the futures market was even more optimistic, trading as high as 1994, which was 46 points above the Friday futures close. Dr Layton said that bank bill futures had a surprisingly quiet day of trading.