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DIVISION OF INTERNATIONAL FINANCE BOARD OF GOVERNORS FEDERAL RESERVE SYSTEM ^ No. 261 August 17, 1966 ' CAPITAL MARKET DEVELOPMENTS ABROAD I. II. Ten Charts on Financial Markets Abroad Latest Figures Plotted in H.13 Chart Series, 1966 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-month Funds London: Yields for U.S. Dollar Investors on 3-month Funds Interest Arbitrage: Frankfurt/London, Zurich/London Interest Arbitrage: New York/Canada Interest Arbitrage: New York/London Short-term Bond Yields Long-term Bond Yields Spot Exchange R a t e s — M a j o r 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 Y O R K , L O N D O N , MONTREAL: YIELDS FOR U.S. DOLLAR INVESTORS O N 3 - M O N T H FUNDS DOLLAR DEPOSIT RATES; NEW Y O R K - L O N D O N E U R O D O L L A R DEPOSIT U.S. CERTIFICATE OF DEPOSIT J , EURO DOLLAR OVER J I U.S. CERTIFICATE OF DEPOSIT i , FINANCE CO. PAPER RATES ( c o v e r e d ) . QUO TED JN NEW YO RK CANAD AN FINANCE IMPANY U . K . HIRE PURCHASE U.S. FINANCE COMPANY Mar. ]••. 1964 Sept. Dec. Mar. JuH. 1965 Sept. Mar. Jun. 7966 Sept. Dec. L O N D O N : Y I E L D S FOR U . S . D O L L A R I N V E S T O R S O N 3 - M O N T H F U N D S EURO D O L L A R D E P O S I T RATES 180 DAY 9 0 DAY CALL 30 D A Y - HIRE PURCH ASE A N D L O C A L A U T H O R I T Y D E P O S I T RATES ( c o v a r e d ) EURO D O L L A R D E P O S I T HIRE P U R C H A S E [DIFFERENTIAL FAVOR HiRE P U R C H A S E 1 I FAVOR EURO-DOLLAR LOCAL AUTHORITY DEPOSIT EURO D O L L A R D E P O S I T FAVOR LOCAL A U T H O R I T Y DIFFERENTIAL FAVOR E U R O - D O L L A R 1964 1965 1966 '1 v (INTEREST A R B I T R A G E : F R A N K F U R T / L O N D O N , Z U R > C H / L O N D O N FRANKFURT INTERBANK L O A N RATE VS. L O N D O N E U R O - D O L L AR~R ATE ( C O V E R E D ) I N TERMS O F D M _ — INTERBANK LOAN RATE EURODOLLAR ! r _DIFFE*ENTIAL FRANKFURT FAVOR EURO DOLLAR Z U R I C H D E P O S I T RATE V S . L O N D O N EURO D O L L A R RATE ( C O V E R E D ) I IN T E R M S V o k / t V h S FRANCS EURODOLLAR SWISS DEPOSIT RATE T DIFFERENTIAL FAVOR ZURICH FAVOR E U R O D O L L A R E PRICE o r O O L D I N L O N D O N 35.2 35.0 1964 1965 1966 ) INTEREST A R B I T R A G E , U N I T E D S T A T E S / C A N A D A Friday figurei 3 - M O N T H TREASURY BILL RATES 6 C A N . F I N . CO. (PAPER 4 CANADA ^ " 1 UNITED STATES BILL RATE D I F F E R E N T I A L A N D F O R W A R D C A N A D I A N D O L L A R 1 S P R E A D I N FAVOR OF CANADA 1 I I vV — . I PREMIUM 0 W I FORWARD RATE DISCOUNT 1 ~r ~r ™r I ~r 3 - M O N T H C O V E R E D RATE D I F F E R E N T I A L S (NET I N C E N T I V E S ) P R I M E F I N A N C E PAPER Z V l A A I i r FAVOR CANADA / M a 1 J V 0 FAVOR U.S FAVOR CANADA TREASURY B I L L S 0 M J S D 1963 M J S 1964 D M J S 1965 D M FAVOR U.S. I I I I I I I I J S D 1966 1 0 1 , NEW Y O R K / L O N D O N Pridoy fig 3 - M O N T H TREASURY BILL RATES U.K. LOCAL AUTHORITY DEPOSITS NEW YORK 1 RAT E D I F F E R E N T I A L A N D 3 - M O N T H FOR W A R D S T E R L I N G 1 1 1 1 | 2 1 S P R E J ID I N FAVOR 1 OF LIDNDON1 1 1 i f - 1 t'REMIUI1# \ J 1 i1 i FORWA RD R l iTE | L 1 1 + 0 i IISCOUIIT 1 1 1 1 1 I I | I | 1 1 n l /»A 1 I V 1 1 1 1 i i i i i i I | RATE D I F F E R E N T I A L W I T H F O R W A R D E X C H A N G E COVER (NET I N C E N T I V E ) I N FAVOR OF L O N D O N IN FAVOR OF NEW YORK 1963 1964 1965 1966 2 I | SHORT-TERM INTEREST RATES * Jl I U.K. 2 A EURO DOLLAR - LONDON U.S. _4 3 SWITZERLAND 2 9 JAPAN 8 7 6 CANADA 5 US. 1962 1963 1964 1965 3-month t f otury bill role* for ail countries except Jopon (Avgrgp« role on bank loom and discounts) ' Switierlond|f3 month deposit rolej and Germany (interbank loon Rale) 3 month rate lor U S. dollar deposits in London 1966 ! l O W O - T I K M BOND YIELDS GERMANY EURO DOLLAR BONDS * U.S.! NETHERLANDS ,<"7 1 CANADA 1 HTsV SWITZERLAND 1962 1964 1966 SPOT EXCHANGE RATES - MAJOR CURRENCIES AGAINST U.S. DOLLAR 1.6 SWISS FRANC 1.2 GERMAN MARK U.K. STERLING BELGIAN FRANC FRENCH FRANC DUTCH GUILDER CANADIAN DOLLAR ITALIAN LIRA JAPANESE YEN M I 1964 S M J 1965 S D M 1 1966 S D 3 - M O N T H FOB WARD EXCHANGE R A T I S AGAINST UJ,. D O L L A R S - N E W YORK GERMAN MARK SWISS FRANC I V POUND STERLING DISCOUNT2 DUTCH GUILDER FRENCH FRANC CANADIAN DOLLAR DISCOUNTA G A I N S T POUND S T E R L I N G - L O N D O N Friday ligvres SWISS FRANC GERMAN MARK U.S. DOLLAR DISCOUNT0 M ! 1964 M 1 1965 S D S N 1966 0 INDUSTRIAL STOCK INDICES Bono icole 300 SWITZERLAND 250 GERMANY U.K. 200 U.S. 150 100 300 250 JAPAN 200 CANADA y \ ^ _ / U.S. 150 100 1963 1964 Swill lonk Corporation industrial H o d indei * Jopon: inden el 225 i»duilrial and other tlockt li 1965 1966 \v August 17, 1966 H. 13 No. 261 II. Latest Figures Plotted in H.13 Chart Series, 1966 (all figures per cent per annum) Upper Panel Chart 1 (Wednesday, August 10) Euro-$ Deposit Chart 5 (Friday, August 12 ) 6.53 6„31 U.S. 5.,67 U.S. certif. of deposit *Lower Panel ) August 12 (Friday, Finance co. paper: U.S. Canada Hire-purchase paper, U.K. 5. 63 6. 37 6. 70 180-day -1,,61 Net incentive (U.K. + ) +0C 04 6.50 6.88 6.13 Hire-purchase paper ((August 5) Local-authority deposit 5.75 (August 5) Chart 3 Upper Panel (Period: August 1-7 ) Interbank loan (mid-point) 6.88 Euro-$ deposit (average) 6. 37 Lower Panel Forward pound Treasury bills: Euro-$ deposits: 6.12 6.44 +1,,65 Chart 6 (Friday, August 12) Chart 2 (Friday, August 12) Call 7-day 30-day Spread favor U.K. (Date: July 15 Zurich 3-mo. deposit Price of gold (Friday, August 5 ) ) 4.88 6.53 4.92 U.S. U.K. Canada Interbank loan rate (German) (August 1-7) Euro-$ deposit (London) Zurich 3-mo. deposit July 15 (Date: Japan composit rate (Date: April 30 ) 6,89 6.50 4.25 7.53 Chart 7 U.S. Gov't. (Wed., August 10) 4. 78 U.K. War Loan (Thurs. , August 11) 7.29 4.25 German Fed. (Fri., August 29) 8.27 35.191 Swiss Confed. (Fri., August 5) 4.07 Canadian Gov't. 5„£ Chart 4 (Friday, August 12 ) (Wed. ,Aygjst U) Netherlands Gov't perpetual 37. (Friday, July 29 ) 5,91 6.79 Canada U.S. Spread favor Canada 4.92 4.88 +0.04 Euro-$ bonds (Fri. , August 12) Forward Canadian $ 40.19 For descriptions and sources of data, see special supplement to H. 13, Number 239, March 16, 1966. Net incentive (Canada +) +0.23 Treasury bills: Canadian finance paper 6.25 * Corrected figures for August 3, 1966: Finance Co„ Papers U.S. 5.63 Canada 6,22 Hire Purchase Paper; U.K. 6-11
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