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DIVISION OF I N T E R N A T I O N A L F I N A N C E BOARD OF e O V E R N O R S "o ' 244 April 20, 1966. CAPITAL MARKET DEVELOPMENTS ABROAD I. II. Ten Charts on Financial Markets Abroad Latest Figures Plotted in H.13 Chart Series, 1966 Note on Chart 7 In this issue of the H.13 series, a yield for long-term U.S. dollar-denominated bonds traded in London (Euro-dollar bonds) is introduced in Chart 7» The yield plotted is an average of yields to maturity calculated from the prices of four foreign government U. S. dollar loan issues. The bonds composing the average are: a) b) c) d) Kingdom of Denmark, 5-1/2 per cent (1970-84) issued in April 1964; Kingdom of Norway, 5-1/2 per cent (1984) issued in May 1964} Kingdom of Norway, 5-1/2 per cent (1985) issued in March 1965j and Government of Austria, 6 per cent (1979/84) issued in January 1964. I. Ten Charts on Financial Markets Abroad Chart 1 Chart 2 Chart 3 Chart Chart Chart Chart Chart 4 5 6 7 8 Chart 9 Chart 10 New York, London, Montreal: Yields for U.S. Dollar Investors on 3-tionth FurfEs London: Yields for U.S. Dollar Investors f on 3-month Funds Interest Arbitrage: F^nkfurt/London, Zurich/London Interest Arbitrage: New York/Canada Interest Arbitrage: New York/London Short-term Interest Rates Long-term Bond Yields Spot Exchange Rates—Major Currencies Against U.S. Dollar 3-month Forward Exchange Rates Industrial Stock Indices Europe and British Commonwealth Section. OFFICIAL USE ONLY (Decontrolled after "six months) NEW YORK, YIELDS FOR DOLLAR LONDON, MONTREAL: U.S. DOLLAR DEPOSIT INVESTORS O N RATES: NEW 3-MONTH FUNDS Y O R K . L O N D O N EURO-DOLLAR D E P O S I T U . S . C E R T I F I C A T E OF D E P O S I T | E U R O DOLLAR OVER U . S . C E R T I F I C A T E OF D E P O S I T FINANCE Friday figures CO. PAPER RATES (covered)-. QUOTED IN NEW YORK fi CANADIAN FINANCE COMPANY U.K. HIRE PURCHASE U.S. FINANCE COMPANY Mir. Jun. 1964 Sept. Dee. Mir. iun. 1965 Sept. Dee. Mir. J**. 1966 Sept. Bsc. L O N D O N : YIELDS FOR U.S. DOLLAR EURO-DOLLAR D E P O S I T RATES INVESTORS ON 3-MOIWH /XT FUNDS 9 0 DAY 1 8 0 DAY 3 0 DAY HIRE PURCHASE AND LOCAL AUTHORITY CALL DEPOSIT RATES (covered) EURO-DOLLAR DEPOSIT HIRE PURCHASE r T DIFFERENTIAL FAVOR HIRE P U R C H A S E FAVOR E U R O D O L L A R LOCAL AUTHORITY DEPOSIT EURO-DOLLAR DEPOSIT 1 1— DIFFERENTIAL FAVOR LOCAL AUTHORITY FAVOR EURO-DOLLAR 1964 1965 1966 H INTEREST ARBITRAGE: FRANKFURT INTERBANK FR A N K f U R T / L O N P O N , LOAN RATE VS. Z U R I C H / L O N D O N L O N D O N E U R O - D O L L AR~~RAT E ( C O V E R E D ) Per cant per annum IN TERMS OF D M _ I N T E R B A N K LOAN R A T E EURODOLLAR r 1 DIFFERENTIAL FAVOR FRANKFURT FAVOR EURO-DOLLAR ZURICH DEPOSIT RATE VS. LONDON EURO-DOLLAR RATE IN (COVERED) TERMS/OF SWISS FRANCS EURO-DOLLAR S W I S S DEPOSIT RATE T T DIFFERENTIAL FAVOR E U R O D O L L A R n PRICE OF GOLD IN LONDON 35.2 35.0 1964 1965 1966 INTEREST ARBITRAGE, UNITED S T A T E S / C A N A D A 3-MONTH TREASURY BILL R A T E S C A N . F I N . CO. IPAPER CANADA — U N I T E D STATES BILL R A T E DIFFERENTIAL AND FOR WAR ) CANADIAN DOLLAR S P R E A D IN FAVOR OF CANADA \ J PREMIUM DISCOUNT FORWARD RATE r w N 3-MONTH COVERED RATE DIFFERENTIALS (NET INCENTIVES) PRIME FINANCE PAPER| FAVOR CANADA A FAVOR U.S. FAVOR CANADA T R E A S U R Y BILLS FAVOR U.S. 1963 1964 1965 1966 INTEREST ARBITRAGE, Friday figures 3-MONTH TREASURY NEW BILL Y O R K / L O N D O N RATES LONDON U.K. LOCAL AUTHORITY D E P O S I T S NEW YORK RATE DIFFERENTIAL FORWARD AND STERLING I 3-MONTH I I S P R E A D IN F A V O R OF L O N D O N PREMIUM DISCOUNT FORWARD RATE RATE DIFFERENTIAL WITH FORWARD EXCHANGE COVER (NET INCENTIVE) IN F A V O R OF L O N D O N IN F A V O R OF N E W Y O R K 1963 1964 1965 1966 SHORT-TERM INTEREST RATES * U.K. EURO-DOLLAR - LONDON U.S. •xv V GERMANY JAPAN U.S. CANADA SWITZERLAND 1963 1962 3 month treasury bill roles for oil countries except Jopon. ond Switzerland ( 3 month deposit rote ) 3-monfh rote for US dollar deposits in London. 1964 1965 ( Avaroge rote en bonk loons and discounts ) 1966 tONS-IEBM B O M D YIELDS tt.K. V EURO DOLLAR » » ! » » $ ' U.S. HETH-ERLAN8& tt.S. 1966 *Averoge ol vields lor louf lor eiyn government dollor bondb avoled in London S P O T E X C H A N G E RATES - M A J O R CURRENCIES A G A I N S T U.S. DOLLAR 1.6 S W I S S FRANC U.K. STERLING I I I I BELGIAN FRANC FRENCH FRANC DUTCH GUILDER CANADIAN DOLLAR ITALIAN LIRA J A P A N E S E YEN 1.2 M S 1964 0 0 M 1965 J ^66 S D • 3-MONTH Friday figure* AGAINST . !') F O R W A R D E X C H A N G E RATES U. S. D O L L A R S G E R M A N MARK S W I S S FRANC V I POUND STERLING " DISCOUNTAG A IN ST P O U N D STERLING - L O N D O N PREMIUM M S W I S S FRANC U. S . DOLLAR DISCOUNTAGAINST POUND STERLING - LONDON PREMIUM* DUTCH GUILDER BELGIANFRANC — , k v y FRENCH FRANC 1964 DISCOUNT- 1965 1966 INDUSTRIAL STOCK INDICES 3 0 0 S W I T Z E R L A N D 2 5 0 G E R M A N Y U.K. 200 U.S. 150 100 A JAPAN C A N A D A r " ' ii M i i M ; i i 1 9 6 3 * * 1 I I 1 1 1 1 I I 1 1 U.S. I I 1 1 1 9 6 4 ® a n k Corporation industrial slock inde* Japan: ,nde* of 22 5 industrial and other stocks traded oft 5wltl I I 1 9 6 5 Tokyo enchonge 1 I I I I 1 1 1 1 1 I I 1 1 1 1 1 9 6 6 \0-H' No. 244 II L a t e s t Figures P l o t t e d i n H. 13 Chart Series, 1966 ( a l l f i g u r e s per c e n t per annum) Chart 4 Chart 1 Upper panel (Wednesday, Abri^ 1g (Friday, ) Euro-$ d e p o s i t 5 7S U.S. c e r t i f . of d e p o s i t 5 - 74 Lower panel (Friday, ) April 15 U.S. Canada Hire-purchase paper, U.K. S. S7 5 Q? ) •40. 37 Forward Canadian $ -n.f)6 5 81 Z ! 1 6 01 51 _) Euro-$ d e p o s i t (average) 5r 75 J 3. 3 n R88 R IS April 8 S «« :5 ) U.K. U.S. 5 45 A 64 Spread favor U.K. -0.81 Forward pound -Q, 8 9 Net i n c e n t i v e (U.K. +) -OnOR Chart 6 (Friday, April 15 5 93 Price of gold (Friday, April Treasury b i l l s : Interbank loan (mid p o i n t ) Zurich 3-mo. d e p o s i t ?6 Canadian f i n a n c e paper (Friday, Euto-$ d e p o s i t s : Lover panel (Date: February 15 4 96 4.64 Chart 5 April i s Hire-purchase paper (April 8) Local-authority deposit (April 8) Chart 3 Upper panel (Period: April 8-IS ) Canada U.S. Spread favor Canada Chart 2 Call . V.2S 7-day . 5. is 30-day s. Sft April 15 Treasury b i l l s : Net i n c e n t i v e (Canada +) Finance co. paper: (Friday, April 20 J Treasury b i l l s : U.S. 4„64 U.K. 5.45 Germany Canada .tin \Apr OA 5 75 Euro-$ d e p o s i t (London) Zurich 3-mo. d e p o s i t (Date: February 15 Japan composite r a t e (Date: December 31 3,88 ) -L-MLL. ) Chart 7 * -L., 5 I . U.S. Gov't. (Wed., Apr. 13) For d e s c r i p t i o n and sources of data s e e s p e c i a l annex to H. 13, Number 239, March 16, 1966, - Euro-dollar Bonds 6 17 U.K. War Loan (Thurs., Apr 6 77 J lr,98 Swiss Confed. ( F r i . , April 8 ) 1-93 Canadian Gov't. (Wed., April 13) 5r 67 Netherlands Go v ' t, perpetual 3?0 ( F r i . , April 8 J 5,85„ German Fed. ( F r i . , Apr. 8
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