	u s credit market outlook mini refunding a hefty slice of new u s treasury supply is not the most welcome prospect for a slumbering credit market but at least this week s offerings should provide it with some focus economists said banks and mutual funds have cash that should be put to work so the auctions should breathe some life into the market said economists at merrill lynch capital markets inc the treasury will place a billion dlr package of two year four year and seven year notes on the sales block this week the mini refunding which will raise billion dlrs in new cash comprises billion dlrs of two year notes for auction on tuesday billion dlrs of four year notes on wednesday and billion dlrs of seven year notes on thursday the market also faces the regular weekly three and six month bill auction today amounting to billion dlrs the mini refunding does not come at a particularly auspicious time for the market bond prices have been drifting sideways in a narrow range against the backdrop of a cloudy u s economic outlook diminished chances of a change in federal reserve board policy and a stable dollar moreover the bond market s inertia has compared unfavourably with the rash of activity taking place in high yield markets overseas like the u k as well as in u s equities but according to the merrill lynch economists there are signs the pall hanging over the u s bond market is lifting a bit customer activity has been light but all on the buy side and there is a marked absence of selling they said in a weekly report philip braverman of irving trust securities inc believes banks will snap up the two and four year issues at this week s sales the banks are in need of investments that provide earnings though the yield spread to the cost of carrying these maturities has been wider it is still positive he said in a weekly market review but economists agreed not even the auctions will generate enough impetus for a major move this will only come once the overseas markets have had their run based on last week s events there is little to indicate that the appetite for yield has begun to wane said economists at salomon brothers inc indeed talk persisted last week that japanese investors are planning to re weight their portfolios in favour of the higher yielding markets at the start of japan s new fiscal year on april and while traditionally the japanese have not been big buyers of the shorter dated issues on offer at this week s u s auctions such reports undermine market confidence even actions by the british australian and canadian monetary authorities to curb the rise of their currencies should also enhance the attractiveness of their respective bond markets the salomon brothers economists said meanwhile ecomomic releases are unlikely to enliven the u s market unless they deviate widely from expectations economists said this week s economic calendar begins on tuesday with february durable goods orders economists expect a rebound from january s depressed levels peter greenbaum of smith barney harris upham and co said several areas including transport equipment should have bounced back but a decline in military capital goods will cap total new orders he forecasts a rise of two pct after january s pct slump some other economists foresee a gain as large as five pct friday s consumer price report for february is expected to show an increase of about pct after a pct january gain economists said energy prices the driving force behind the january rise rose more moderately last month while food prices declined meanwhile economists warned that the federal funds rate will be subject to volatility in the weeks ahead due to the approach of quarter end and the mid april tax date some economists expect the fed to execute a bill pass this week because its adding requirement increases sharply in the new statement period beginning on thursday fed funds traded at pct late friday and are expected to open near that level reuter 
