950819

Debt futures little

changed in pit trade

CHICAGO: U.S. debt futures ended quiet pit trading little changed on Friday.

Traders complained about the lack of interest before the weekend and next week's Federal Open Market Committee meeting, as well as the two and five-year Treasury note auctions.

They noted little reaction to afternoon news that the United States and Kuwait have decided to hold war games early as part of U.S. warnings to Iraq.

"I think that (Iraq news) affected the metals more," said a Eurodollar floor broker. "This was just terribly slow."

He said the exchange's estimated volume for the two front Eurodollar months totalled only about 67,000 contracts.

"I'm just guessing, but I think it is going to be the lowest volume day in a long time," he added. "I think we're going to have trouble cracking 100,000 in the first four (contract) months combined."

In the long end, the expiration of the September options on T-bond and 10 year T-note futures helped enliven trade, but even that generated, but limited interest, traders there said.

"It was very boring. It (expiration) was just a non-event," said a T-bond futures floor broker.

September T-bonds and T-notes stayed close to the 110-00 and 108-00 strike prices, respectively.

The broker said one dealer sold 800 to 1,000 September futures at midday when options stopped trading and the market's thiness allowed it to push futures a few ticks lower.

Later in the session a bank offered about 5,000 nearby T- bond futures, pressuring the contract to the day's low at 109- 30/32, but no follow-through emerged, the broker added.

Futures showed muted reaction early in the day after the University of Michigan August preliminary consumer sentiment index showed a rise to 96.5, versus forecasts for a dip to 94.3. The index is released only to paying subscribers.

September T-bonds settled unchanged at 110-01/32, 10-year notes ended up 2/32 at 108-01/32, muni-bonds rose 3/32 to 111- 02/32, December Eurodollars ended flat at 94.08 and December T-bills eased one basis point to 94.56.-Reuter