TRADING RANGE LIKELY TO CONTINUE IN DEBT FUTURES

  U.S. economic data due out next week is
  unlikely to hold any surprises that will shake U.S. interest
  rate futures out of their relatively narrow trading range of
  the last 3-1/2 months, financial analysts said.
      "People don't seem to have any firm conviction about the
  current strength of the economy or about the Federal Reserve
  doing anything," said Drexel Burnham Lambert analyst Norman
  Mains.
      The narrow range trading is also taking its toll on trading
  volume, he noted. "We've had a decline in activity as recent
  economic statistics have not greatly changed people's
  viewpoints on interest rates," Mains said.
      The data, which has provided not clear-cut view of the
  economy, coupled with dampened activity in the foreign exchange
  markets after the Paris initiative has made for "less than
  ebullient market action," Mains said.
      He added, however, that Treasury bond futures could be in
  for a retracement after the recent rise as they are near the
  top of the trading range.
      "My view is that the economy remains relatively strong and
  market participants will see that current prices are
  unjustified," Mains said.
      Refco Inc senior vice president Michael Connery also noted
  that the market is showing very little momentum and lacks
  retail interest. "All of the movement occurs at the opening,"
  afterwhich volume dwindles and momentum fades, Connery said.
      Although data during the week was mildly positive for bond
  prices, the small rise in February producer prices and downward
  revisions in January retail sales and industrial production
  were "not real exciting," said Prudential Bache analyst Fred
  Leiner.
      "There is no one factor that will push us through the highs
  at this moment," Leiner said.
      Next week's revision to fourth quarter U.S. Gross national
  Product is also likely to be of little interest to the market,
  said Kleinwort Benson chief financial economist Sam Kahan.
  Still, forecasts for first quarter GNP could play a role in the
  direction of bond prices over the next month.
      Kahan said his early estimate for first quarter growth is
  around three pct, due largely to a buildup in inventories
  reflected in the January inventory data Friday, which showed
  the largest increase since 1979.
      "The key question will be not whether there is a large
  increase in first quarter GNP, but whether any increase is
  sustainable or a one shot deal," Kahan said.
      He said that a sizable increase in first quarter GNP
  stemming from an increase in inventories will be a drag on
  second quarter growth.
      If that is the case, GNP in the second quarter could ease
  back to a one to two pct growth rate, Kahan said.
  

