TRADE OUTLOOK

Dominion, Volume 14, Issue 257, 25 July 1921, Page 8

TRADE OUTLOOK

STOCK EXCHANGE MORE CHEERFUL AS RESULT OF THE REDUCTION IN BANK RATE (Hee. July 24, 5.5 p.m.) Lnodon, July 23. The reduction of the bank. rate has caused a more cheerful tone on tho Stock Exchange, with improved quotations for gilt-edged securities, but those who anticipated an increase in business have been seriously disa.ppoint.ed, for all eectipns remain dull, especially industrials, to which cheaper money might have been expected to give a stimulus. Optimists .aro looking forward to a further reduction to 5 per cent, before the autumn demand for money commences. If tho reduction occurs we may see a recovery to activity, but in the meantime there is no indication that investors are departing from their recent attitude of locking up their money in fixed interest securities rather than speculative investments. A feature of tho Stock Exchange is the firmness of recent giltedged issues, many of which were at a discount, but are now quoted at substantial premiums, owing to the Treasury’s embargo on new trustee issues while the Government’s new bonds aro under offer. Interest in the foreign exchange market centres round the" dollar. The recent slump in American exchange is attributable mostly to speculative buying in dollars here and selling in sterling at New York. This is likely to increase the dollar supply in the autumn, when trade demands will be strongest. Favourable Prospects for Butter and Cheese. The prospects for the forthcoming Australian and New Zealand butter season appear to be very favourable. Traders anticipate a strong market till March. Owing to the drought, the English output has ceased exceptionally early, compelling Devonshire, Somerset, and other dairying centres to buy Government butler instead of marketing their own. Similar conditions have caused a shortage of American supplies, and if the exchange position remains as at present America will be likely to buy large quantities in the near future. The drought in Europe has forced France. Germany, Switzerland, Norway, and Sweden to buy Danish butter. Even Austria and Ju'go-Slavia are finding the money to purchase Danish. Some Continental buyers are also taking Australian and New Zealand butter from the British Government stock's. Several hundred tons have already gone to the Continent. It is estimated that the Government stocks aro now about 35,000 tons, which are likely to be exhausted by mid-October. After that we must be almost entirely dependent on supplies from Australia and New Zealand. v , 'Che outlook for cheese, is equally satisfactory. The recent set-back was largely attributable to the heated condition of one or two recent arrivals from New Zealand and Canada, which were offered at low prices, but the effects of the drought here are permanent. No matter how much ram falls now, tion must be far below requirements, espcciallv as the heat has caused a largely increased consumption of cheese in preference to meat. Wool Manufacturing Trades. The Yorkshire wool manufacturing ‘trades are not showing much sign of revival, though a few nulls are running full time, principally to work off arrears No general increase in activity is possible till new orders arrive on a much larger scale, but some improvement may be expected from the lower cost of production, due to the revise combing tariff and reduction in wages, a S some wool has been held up pending an adjustment of combing charges. Germany is a serious competitor m this branch of industry. Most of the German combing factories are busy, and are fully booked up for the half-year. French mills also are active, while a largo number of Bradford plants are idle. Germany also is buying largely tops and noils from France and Belgium Messrs. Krcglinger. of Antwerp, report that Germany has lieen the dominating factor of the top market, and is able to quo comparatively low prices for dress goods. —Aus-N.Z. Cable Assn.