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Commodities : Tuesday, Nov. 12, 1985 : Treasury Bond Futures Soar

November 13, 1985|From Associated Press

Treasury bond futures soared to five-year highs Tuesday on the Chicago Board of Trade amid growing conviction that Congress will be able to pare the federal budget deficit.

Treasury bond futures for delivery in December finished with a gain of more than 1 percentage point, closing at the highest level for a Treasury bond contract since December, 1980.

"There's a general consensus that there will be a significant cut in the budget deficit sometime soon," said Gary Dorsch, senior analyst in Chicago with G. H. Miller & Co.

"For the first time in recent memory, we have a consensus between Republicans and Democrats that the budget should be cut through reduction in expenditures without raising taxes," Dorsch said.

The sentiment fueled heavy buying in the Treasury bond pit.

Buyers also were encouraged by the belief that the Federal Reserve will maintain an easy credit posture because of weakness in the U.S. economy, said Sam Kahan, chief financial economist in Chicago with Kleinwort Benson Government Securities.

Grain and soybean futures prices were mixed on the Chicago Board of Trade.

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