VOLATILITY LIKELY TO REMAIN LOW IN DEBT FUTURES Financial analysts see little chance that U.S. interest rate futures will break out of their narrow ranges and low volatility during the remainder of the week. "We got a little volatility Wednesday," said Staley Commodities International analyst Jerome Lacey. "But for the moment we're still in a trading range." Even unexpected developments concerning the growth of the U.S. economy may not be enough to spur the market out of its sluggish state, the analysts said. "It (the bond market) has not yet demonstrated that it can break out of its very low volatility," said Carroll McEntee and McGinley analyst Denis Karnosky. "It needs something, but it's not going to be news about the economy," he said. Karnosky said that the bond market will possibly break out of the doldrums if participants perceive that the dollar has stabilized and the Federal Reserve has more room to conduct monetary policy. But even Wednesday, when fed funds were below six pct, the dollar strong and oil on the soft side, bond futures attracted eager sellers when contracts approached recent highs, he said. In addition to a changing perception about the dollar and monetary policy, Golden Gate Futures president Norman Quinn said the beginning of April could bring foreign investors back into the marketplace. "The market is beginning to feel there may be demand at the beginning of the fiscal year in Japan on April 1," Quinn said. Quinn echoed the sentiment of many analysts that there are large amounts of cash waiting to be invested. If Japanese investment in U.S. securities does materialize at the start of Japan's fiscal year, domestic funds may also flow into the bond market, he said. "We could get a stiff rally, possibly enough to bring yields on long bonds down to seven to 7-1/8 pct," compared to the current yield of about 7.5 pct, Quinn said. In the meantime, even the prospect of new supply is not likely to move futures. The Treasury's announcement of a 15 billion dlr refunding operation did little to move cash government securities prices late Wednesday after the close of futures. "I'd be surprised if supply pushed us out of it (the trading range)," Lacey said.