FINANCE AND MARKETS

Dominion, Volume 14, Issue 43, 15 November 1920, Page 5

FINANCE AND MARKETS

9 EUROPEAN EXCHANGES DEMORALISED WOOL OUTLOOK BRIGHTER DRAPERY TRADE DEPRESSED By T«le«rash--Preiii AnoeiaUon-Oowrlja' (Rec. November M, 5.5 p.m.) London, November 13. Continental oxchnnges are demoralised, and have displayed much foverishnoss, mainly owing to Franco's sudden heavy rush to cover exenange commitment in connection with recent heavy imports of American goods and produce which wore arranged somo time ago, but tho necessary exchange was not bought owing to tho belief, which proved erroneous, that the value of the franc would improve with tho flotation of the French Government loan. Other European exchanges have continued to advance, German marks reaching 310. to sterling. But advances, though theoretically 'favourable to Britain, are really unsatisfactory, and merely serve to reduco the Continentals' buying power in oar markets, thus severely hampering trade. Tho monetary situation arising from foreign exchanges largely dominates tho London Stock Exchange, causing business to bo confined mainly to investment stocks, as speculative issues arc considered to bo too dangerous. Improvement in business to unlikely till conditions are more settled. The mining market is particularly dull, except the Barrier group, which is enjoying n ftno spurt on the news of the settlement of tho strike, many would-be buyers being unable to obtain shares. The metal markets are dull. The demand for tin is very small, business Toeing only from hand to mouth, but only a few users havo covered forward requirements, so whon confidence is restored and consumers resume buying there may bo a sharp advance. Tho settlement of tlie Broken Hill striko is held responsible for the collapse.in lead, but in the present state of the markets any excuse is good enough for lower quotations - . The outlook for wool is slightly more cheerful, as machinery requirements are becoming- more insistent. There is better inquiry from the United Spates, and several European countries, but Bradford tupmakers and spinners are still holding off, and will not. operate on the present basis of raw materials aud values. Tho "Manchester Guardian," reviewing tho position in the •wholesale drapory trade, says: "The situation has changed greatly since March. In plnco of a boom there is now widespread depression and much short time am unemployment. Orders both nt homo and abroad have fallen off, owing largely to the ndvorso Continental exchanges and the growing belief that prices aro likely to continue to fall. Householders have benefited to sonio extent, but finished articles generally do uot show similar reductions to those in raw material, owing to tho advanced wages in every process of manufacture, higner rent, rates of transport, taxation., aud other charges. In face of these factors it. is difficult to account for the beliefMn an avalanche of falliing i>rices within tho next feyv months or to find evidence to support it." The "Guardian" shows that of 75 items in the drapery trade, the wholesale prices of 41 lm»f advanced In comparison with those of March, in 16 they have beeu reduced, and IS they aro unchanged.' Tho advances ara usually more siilistantial than I the reductions.—Aus.-N.Z. Cable Assn.