Treasury prices languished for the second straight day in what market observers termed a quiet session underscored by technical factors.

The bellwether long bond traded at 101.02-101.06, yesterday, down 7/32 in light trading, while short-term and intermediate Treasuries sold off less dramatically.

With little hard news to rely on, technical trading -- when dealers buy and sell securities based on historical price patterns -- has underscored the Treasury market for the last two or three days.

On Tuesday, for example, the futures market established what is known as a "triple top" as the September bond contract matched Friday's high and the high achieved on May 29. The inability to break this level of resistance for the third time caused a sell-off of the futures contract, which spilled over to the cash arena, traders said.

Yet another technical development occurred yesterday, when the September bond contract opened lower than its price at Tuesday's close, said F. Ward McCarthy, a managing director at Stone & McCarthy Research Associates. The poor opening of 99.08, 1/32 lower than Tuesday's close of 99.09, caused futures prices to slide once again. September bond futures closed yesterday at 99.04.

Despite the movement in the futures market, traders described volume in the cash market as light. Mr. McCarthy attributed the dull trading session to dealers waiting for a flood of potentially market-moving reports due out today and Friday.

These reports include the May producer price index, retail sales and jobless claims today, and the May Consumer Price Index on Friday. Traders said they unloaded some cash market positions in preparation for today's reports, especially the producer price index, which may show a slight upswing in inflation.

Mr. McCarthy said the reports would provide little new information to detract from the consensus that the economy will continue to grow, albeit at a slower than average pace. According to a Bond Buyer survey of 17 economists, the May PPI will rise 0.2%, while retail sales should rise 0.7%. The survey also showed that the economy should experience a 7,000 unit reduction in jobless claims.

The Bond Buyer survey indicated a 0.4% rise in the CPI.

"The market traded technically," Mr. McCarthy noted. "There's not a whole lot of excitemment."

In fact, several traders said they do not expect any strong consensus to emerge about the economy that would give the Treasury market a clear and certain direction for the next month or so.

Yesterday, for example, the Federal Reserve Board arranged $2 billion in customer repurchase agreements, a technical move to add reserves into the banking system. The move did not come unexpectedly for most analysts. In fact, one market participant said the Fed's use of customer repos, and not system repos, underscored its commitment to keep short-term interest rates steady for the time being. The Fed has set its federal funds interest rate target at 3 3/4%.

With the economy recovering slowly, and a lack conclusive evidence on the direction of Fed policy, traders said the expect the long bond to move with a yield range of 7 3/4% to 8 1/4% in the near future.

"We're in a period of sideways movements in interest rates," said James Kenney, trading manager at Prudential Securities. "There's a slowly improving economy and stable Fed policy."

In a minor development, two-year notes, which became very expensive to borrow in the repurchase market on Monday, continued to loosen up yesterday.

A government note trader said the repo rate on the two-years was quoted at 3.5% most of the day, close to the 3.75%-3.80% cost of general collateral. The repo rate on the two-year got close to zero on Monday, then loosened up to 2% Tuesday.

The September bond futures contract closed 5/32 lower at 99 4/32.

In the cash market, the 30-year 8% bond was 7/32 lower, at 101 2/32-101 6/32, to yield 7.89%.

The 7 1/2% 10-year note fell 3/32, to 100 31/32-101 3/32, to yield 7.34%.

The three-year 5 7/8% note was unchanged, at 100 19/32-100 23/32, to yield 5.62%.

Rate on Treasury bills were higher, with the three-month bill up one basis point at 3.69%, the 6-month bill up one basis point at 3.82%, and the year bill up one basis point at 4.02%.

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