LONG DEBT FUTURES TURN EASIER IN LIFFE MORNING
Long debt futures turned easier in late
morning on the London International Financial Futures Exchange
(LIFFE) as the dollar and sterling softened, dealers said.
    Long gilt futures had a good start with an opening range of
124-10/32 to 124-14/32 from 124-7/32 overnight as sentiment was
boosted by two opinion polls showing a comfortable lead for the
ruling Conservatives.
    They made a high of 124-19/32 but met chart resistance. A
wave of professional sales hit the market at 1000 GMT, driving
the price to a low of 124 after minor support at 124-6/32 was
breached.
    This coincided with a dip in sterling to 72.2 on its trade-
weighted index against 72.3 at the start and 72.4 last night.
    At the same time, the dollar was dipping below 145 yen
after a night of pressure in the Far East.
    June T-bond futures made lows of 97-18/32 and settled
around 97-21/32 at 1015 GMT after opening 8/32 easier at
97-26/32.
    Analysts said the markets remained cautious because of a
series of talks in Washington this week between finance
ministers of industrial countries.
    June Eurodollars started at 93.33, a technical support
point, and eased to 93.30 or 0.06 below last night.
    Analysts said sterling contracts would have difficulty
advancing beyond current levels if the market discounts the
Conservative victory predicted by the opinion polls.
    Other difficulties were sterling's inability to breach the
2.96 mark ceiling, which could indicate the Bank of England is
trying hard to keep a lid on the U.K. Currency.
    Also, market talk of a further base rate cut has died down,
although another cut was virtually discounted by mid-March.
    June short sterling futures were little changed in early
trading from last night's 90.78 but slipped to a low of 90.73
by late morning. Interbank interest rates were unchanged.
    June FT-SE 100 futures saw an opening range of 204 to
203.70 in line with last night's 203.80 but made a low of
202.20 late morning. The underlying index opened only slightly
weaker and losses extended to 11 points by 1030 GMT.
    Long gilt options featured 465 June calls at 125, 127 at
130 with 118 June puts at 122 and 195 at 126.
 REUTER
