U.S. ECONOMIC DATA KEY TO DEBT FUTURES OUTLOOK

  U.S. economic data this week could be
  the key in determining whether U.S. interest rate futures break
  out of a 3-1/2 month trading range, financial analysts said.
      Although market expectations are for February U.S. retail
  sales Thursday and industrial production Friday to show healthy
  gains, figures within or slightly below expectations would be
  positive for the market, the analysts said.
      "You have to be impressed with the resiliency of bonds
  right now," said Smith Barney Harris Upham analyst Craig
  Sloane.
      Treasury bond futures came under pressure today which
  traders linked to a persistently firm federal funds rate and a
  rise in oil prices. However, when sufficient selling interest
  to break below chart support in the June contract failed to
  materialize, participants who had sold bond futures early
  quickly covered short positions, they said.
      "Everyone is expecting strong numbers, and if they come in
  as expected it won't be that bad for the market," Sloane said.
      Sloane said the consensus estimate for the non-auto sector
  of retail sales is for a rise of 0.6 to 0.7 pct.
      Dean Witter analyst Karen Gibbs said a retail sales figure
  below market forecasts would give a boost to debt futures, and
  she put the range for the non-auto sector of retail sales at up
  0.8 to 1.2 pct.
      Industrial production and the producer price index Friday
  both are expected to show increases of about 0.5 pct, she
  added.
      Retail sales "will tell us whether or not we will be able
  to fill the gap," Gibbs said, referring to a chart gap in June
  bonds between 100-26/32 and 101-3/32 created Friday. June bonds
  closed at 100-4/32 today.
      Also key to debt futures direction, in addition to the
  federal funds rate, is the direction of crude oil prices, said
  Carroll McEntee and McGinley Futures analyst Brian Singer.
      "A higher fed funds rate and firm oil prices precluded the
  market from breaking out of the trading range the last time the
  market approached the top of the range," Singer said.
      In order for bonds to break above the top of the range,
  which is just below 102 in the June contract, "the crude oil
  rally needs to run its course and pull back a little bit,"
  Singer said. "Fed funds are already easing back down toward the
  six pct level."
      The recent surge in oil prices has also been a concern to
  Manufacturers Hanover Futures analyst Jim Rozich, but the rally
  may be nearing a top around 18.50 dlrs per barrel, he said.
      Rozich said he is looking for the June bond contract to
  ease to 99-6/32 and find support.
      "I'm not quite ready to jump on the bullish bandwagon yet.
  The jury is still out this week," Rozich said.
  

