MONETARY OUTLOOK

Manawatu Standard, Volume L, Issue 111, 7 April 1930, Page 7

MONETARY OUTLOOK

LESS CONFIDENT. EFFECT OF BUDGET DEFICIT. LONDON STOCK EXCHANGE. (United Press Association—By Electric Telegraph.—Copyright.) Received April 7, 9.5 a.m. LONDON, April 6. Those optimists who anticipated an early reduction of the bank rate to three per cent.—some even expected it last Thursday—have been disappointed, for yesterday there was a sharp advance of eight shillings per cent, in the rate at which Treasury Bills are allotted and, consequently, the monetary outlook is regarded with less confidence. The immediate result was a decline in gilt-edged securities, which had previously been showing an easier , tendency. ' The knowledge that the Chancellor of tho Exchequer will have to meet a deficit considerably over £40,000,000 is naturally causing anxiety. Another cause of tho weakness of gilt-edged securities has been the profit taking by speculators who bought at the commencement of the upward movement. In this position it is satisfactory that Australian stocks maintain their position and have been only slightly affected by the recent unfavourable financial developments. But while gilt-edged securities have been unsatisfactory, there has been a failamount of activity in industrial stocks, which is, to some extent, a reflection of the revival in Wall Street, _ where there has been a considerable increase in speculation. According. to the Statist, it is estimated that Wall Street stocks have on an average recovered fully 50 per cent, of the depreciation which occurred in November, but whether the prices will continue to advance seems doubtful in view of the general trade depression.