TRADE REVIEW.

Taranaki Daily News, 27 June 1921, Page 5

TRADE REVIEW.

MORE CONFIDENT TONE. EFFECT GF LOWER BANK RATE, WOOL MARKET WEAK.' By Telegraph.—Press Assn.—Copyright. Received June 26, 5.5 p.m. London, June 25. Although the volume of business on the Stock Exchange does not show much increase the tone is distinctly more confident, following the decrease in the bank rate, which came quite unexpectedly, the market having almost abandoned hope of a reduction while the coal strike is unsettled. Other factors contributing to the improved sentiment are the settlement of the cotton operatives’ dispute, Mr. Lloyd George’s hopeful statement in the House of Commons regarding a probable trade recovery, and the failure of the miners’ leaders to induce a general strike.

All these factors are tending to awaken the optimist regarding the outlook of the industrial world. The improved sentiment is most apparent on the giltedged market, where everything is firm. The immediate result is general appreciation of colonials and hardening of recent Tasmanian and South Australian which were previously at a discount of seven-eighths and thirteen-eighths respectively and are now quoted at threeeighths and one. The reduction of the bank rate must have a good effect on trade generally by making it easier for traders to carry stocks of goods which cannot safely be marketed now. It will also enable traders to borrow on less onerous terms, while it should also induce healthy speculation, which will give a much needed feeling of confidence. The reduction is likely to divert money into industrial issues in preference to purely investment securities, which has attracted most of the available money lately, or leaving it on deposit. It is considered very unlikely that there will be any further early reduction in the bank rate, even if the coal strike is settled. Unless a very marked change occurs in the monetary conditions during the coming months the balance of probability lies rather in the direction of a higher bank rate than a decline. The wool position shows a decidedly easier tendency, the effect of the reduction of the bank rate being neutralised by the result of the B.A.W.R.A. wool sales at Liverpool, where prices were about five per cent, below the London closing rates. Weakness wa.s mainly noticeable in Yorkshire sorts, whereas Continental wools were we»i maintained. The trade apparently fears that offerhere of Australian in the next two months will be more than they can absorb. Best sixty-fours tops are now offered at forty-two pence, which is below the cost of production and the price paid for merinos at the last London sales. The demand for tops at Bradford is very slack and in face of large prospective offerings of wool there is little hope of any appreciation In values, while it will bo a matter for congratulation if they do not relapse. Meanwhile, sales of English wool continue to show a serious decline compared with 1920, and many farmers are holding their clips owing to the unsatisfactory prices. The freight market is very dull and ” n? is doing. For Australian wheat the owners are asking 62s 6d to 655. They say there is very little tonnage in tlie Australian neighborhood and it is impossible to send steamers there unless they receive this price. Charterers are holding off, being indisposed to go beyond 605.-—Aus.-N.Z. Cable Assn.