UPTREND REMAINS INTACT FOR DEBT FUTURES The six basis point rise of the past month in U.S. debt futures may be extended next week by a series of U.S. economic reports, analysts said, as long as the dollar holds firm. "Interest rates have declined by approximately 50 basis points over the last month, largely over indications that inflation is not as high as people had feared and the narrowing U.S. trade balance, in nominal terms," Samuel Kahan, chief financial economist with Kleinwort Benson Government Securities, said. Kahan said recent government reports have shown strength in the economy during the first quarter, but his concern is whether the U.S. economy will sustain that strength in the longer term. Weak U.S. economic growth could hurt the dollar, which has become more important to the direction of debt futures than the beneficial impact on interest rates of a sluggish economy. The median trade expectations for Tuesday's U.S. Consumer Price Index and Durable Goods reports are up 0.4 pct and down 1.5 pct, respectively. Meanwhile, the eight billion dlr drop in the M-1 money supply announced this week was "surprising, much larger than expected," according to Kahan. "Unless quickly reversed," such a trend "will ensure that June M-1 growth will be negative," Kahan said. Taken in conjunction with M-2 and M-3 aggregates which Kahan said have "slowed to a crawl, below Federal Reserve Board annual targets," the consequences could be a hint of economic weakness down the road, he said. Based on chart formations, T-bond futures may be poised for further gains, although the advance has been slowed recently, analysts said. September T-bonds "are up almost six points since about May 18," Merrill Lynch debt analyst Jim Duggan noted. September bond futures climbed from the low of 87 a month ago to over 93 in mid-June, Duggan said. While follow-through buying has aided the advance so far, and bouts of short covering have prohibited a slide through chart support, the rally in September T-bonds has been thwarted above the 93 level. "The 93 level is formidable resistance and must be taken out before this activity is anything other than a trading range market," Carroll McEntee and McGinley Futures debt analyst Brian Singer said. The dollar remains the key fundamental factor, and the U.S. currency has made little headway of late, analysts said. "The critical variable remaining in the market is the value of the dollar," Kahan said. Additional influences next week will be possible developments ahead of an OPEC members meeting, and the impact and size of the U.S. budget deficit, "although these will not be in the forefront of the market early next week," Kahan said. In looking ahead to the U.S. Treasury mini-refunding auctions of 24.25 billion in T-notes on Tuesday, Wednesday and Thursday, Singer said the market will likely greet the results with little excitement. However, a successful auction could prove to be a turning point, depending on prevailing market psychology.