Futures in recovery

Press, 2 November 1989, Page 43

Futures in recovery

Interest-rate futures recovered after being sold down earlier yesterday, while share futures finished about midrange having encountered strong resistance at the top. The December bond contract gapped up 4 points, but stop-lossing took it to the low after it broke below 8751. It rallied late in the day when most of the buying came. An Auckland broker said the power play in bond futures was still on. The contract continued to look weak below 8760,- but a rise above 8780 would signal it was going to get bought. Today’s stock tender would affect supply and demand considerably, he said. Yields on physical November, 1993, bonds eased slightly yesterday. The December bill futures followed the same pattern as the bond contract, slumping initially, then rallying in the last hour after Reserve Bank liquidity projections sparked demand. The dealer predicted an immediate trading range for bill futures between 8650 and 8625. Rates on physical 90day assets ended several ticks lower yesterday, while call money was again well under 12 per cent. The Barclays share futures gapped up 35 points, buoyed by strong showings by overseas bourses. However, when it reached the day’s peak, the offshore markets factor looked to be fully impounded into the price. Mirroring the local sharemarket and that across the Tasman, both of which started strongly then faded,

the contract was then sold off down to the low, where it found support. From there, it retraced upwards to finish at a gain of 17 points. The premium to

the physical was 21 points. The contract would keep tracking Wall Street, said the dealer, picking a trading band of 2150 to 2250.