MONEY AND MARKETS

Evening Star, Issue 22573, 15 February 1937, Page 7

MONEY AND MARKETS

THE DEFENCE LOAN HOT LIKELY TO CAUSE INFLATION WOOL PRICES IRREGULAR Pres* Association —By Telegraph—Copyright ■LONDON, February 13. The City, which for weeks has gloomily expected a blow on the chin, found that rearmament rather resembles the kick of a mule, but it is still in the dark as to how Mr Chamberlain proposes to set the financial machinery in motion. “ Stable secrets,” whispered a few weeks ago to the effect that there would be no new borrowing before the autumn are regarded as still substantially correct. The ‘ Investors’ Chronicle ’ expects that the first instalment of the defence loan will total around £60,000,000, with an income tax of 5s and increases in indirect taxes. It considers that the Bank of England must increase its supply of bank cash to enable the banks to support gilt-edged securities. There is no reason why the defence loan should precipitate inflation if recovery continues. The immediate view of the markets is that there is nothing at present to go for, consequently quotations for most securities, excepting armaments, are marked down. “ Gilt-edged industrials suffered a severe setback.” BUTTER. The butter market is still irregular. Last week’s advance resulted in a cessation of interest. There is little help in the position from a speculative viewpoint. Fluctuations must be expected for some time. Continental butters still command a useful premium over New Zealand and Australian, but traders expect that it will be narrowed in the immediate future. AUSTRALIAN EGGS. “™ Shipmentsof Australian eggs’ have almost ceased. COPrfA PRICES. Copra has become firmer on the market, though prices have moved erratically. Consumers are showing moderate interest, and shorts are seeking to cover. WOOL. Irregularity in wool prices in the Australian centres has created a similar tendency in Bradford, where prices are tending to favour buyers, who are anxious to know the basis' on which the Japanese are likely to buy for the remainder of the season. Recent fluctuations have made them hesitant in placing orders. The outlook, however, is regarded as promising, especially in view of the reports that Germany has privately bought the bulk of the Argentine summer clip at a price above that which world buyers paid for the winter clip'. It is stated in well-informed circles that 40/46’s cost her 20 jd, WHEAT. The ' Financial News ’ considers that unless the weather in North America is exceptionally favourable wheat will go higher in the next few omnths,