Bond Prices Climb Due to Dollar's Gain And Outlook for Accord in Budget Talks
NEW YORK -- A stronger dollar and speculation that an agreement is near on cutting the government's budget deficit helped propel bond prices higher yesterday.</br></br>Prices of long-term Treasury issues advanced by about three-eighths of a point, or around $3.75 for each $1,000 face amount. But trading volume was sluggish as dealers awaited details of the lengthy budget negotiations between Reagan administration officials and congressional leaders.</br></br>"Right now, the government market is a captive of the budgetary process," said Alfred G. Roth, senior vice president at Thomson McKinnon Securities Inc. "Nobody is willing to make a substantive commitment until we see something definitive coming out of Washington on the budget."</br></br>The seemingly never-ending budget talks failed to produce an agreement yesterday. However, White House and congressional negotiators have said they are optimistic about reaching a compromise accord of roughly $30 billion before Friday, when across-the-board cuts are scheduled to go into effect under the Gramm-Rudman law.</br></br>"If we don't get a deficit reduction of $30 billion or more, it's not going to sit well with investors," contended Donald E. Maude, chief economist at Midland Montagu Capital Markets Inc. in San Francisco.