Interest-rate futures bearish

Press, 26 October 1989, Page 30

Interest-rate futures bearish

Interest-rate futures ended bearishly yesterday although physical rates were steady.

The bond contract drifted around in the morning but the news that details of the next Government stock tender would be announced today made the market nervous and the contract finished weakly.

The direction of interest rates will depend on the size of the stock offering sending them up if it is a lot.

The bill futures were helped by cheaper call money which ended the day at 12 per cent.

Like the Government stock contract, the bank bills contract bounced around most of the day, trailing off towards the close.

Although there was little fundamental news to move the debt contracts both look

to have more downside. The Barclays share futures contract opened weaker, gapping 35 points. It was kicked down in response to a decline overnight on Wall Street which at one stage was off about 60 points, the London market losing some 40 points, and the Australian market’s weakness on Tuesday. The Barclays contract touched its low at the beginning of the afternoon call but was turned around by a bet-ter-than-expected Australian trade figure for September which saw the Australian market lift and the local market rally by 15 points. The BSI finished marginally above mid-range pushed up by short-covering but still 45 points behind. The premium to the physical halved to 9 points.