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D I V I S I O N OF I N T E R N A TIONAJLiJLUiAJiUZK .ViV BOARD OF SOVERNORS | OF T H E • H. 13 No. 18U F E D E R A L RESERVE SYSTEM February 2k, | : CAPITAL MARKET DEVELOPMENTS ABROAD I, II, I. Nine Charts on Financial Markets Abroad Latest Figures Plotted in H.13 Chart Series, 1965 Nine Charts onFinancial Markets Abroad Chart 1 - International Money Market Yields for U.S. Dollar Investors Chart 2 - Interest Arbitrage, United States/Canada Chart 3 - Interest Arbitrage, New York/London Chart k - Interest Arbitrage for German Commercial Banks Chart 5 - Short-term Interest Rates Chart 6 - Long-term Bond Yields Chart 7 - Industiral Stock Indices Chart 8 - Spot Exchange Rates - Major Currencies Against U.S. Dollar Chart 9 - 3-month Forward Exchange Rates OFFICIAL USE ONLY (Decontrolled after six"months) 1965 Chart I INTERNATIONAL MONEY M A R K E T Y I E L D S FOR U . S . D O L L A R I N V E S T O R S 3 -MONTH EURODOLLAR DEPOSIT VS. CERTIFICATE OF DEPOSIT i NEW D I F F E R E N T I A L : EURO DOLLAR OVER Y O R K O F F f c t i RATES O N S E L E C T E D 3 - M O N T H I N V E S T M E N T S TREASURY COMMERCIAL BILLS- Fully PAPER-Fully Hedged Hedged U . K . NIKE PURCHASE U.S. FINANCE COMPANY j 1963 1 964 1 96 S I N T E R E S T A R B I T R A G E , U N I T E D STATES / C A N A D A Friday figures V ~ 3 - M O N T H TREASURY BILL RATES BILL -3 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 p i A N _ p O L L A R - MONTH COVERED RATE D I F F E R E N T I A L S | N ET I N C E N T I V E S ) FAVOR CANADA FAV08 U._S FAV08 TREASURY CANADA BILLS FAVOR ^'Thursday figuret 196 2, Friday thereafter. US INTEREST A R B I T R A G E , NEW YORK/LONDON 3 - M O N T H T R E A S U R Y BILL R A T E S - R A T E DIFFE: R E N• 1| A L / < n d ^ 1 :3 - M O N T H 1 F O R W A R D STER L I N G XT" 1 i $P N FAVO 8 1 - OF l ( ) N D 0 H ^ HUM h iJr 11 >r; i i 1 1 r " .jI ! / W V UNI J -— / * FORM ! 1 1 i i 1 1 1 1 RATE D I F F E R E N T I A L W I T H 1 I i 11 1 1 1 1 1 1 FORWARD EXCHANGE 1 1 COVER 1 K l I iT ' , l I I l (NET I N C E N T I V E ) 1 1 INTEREST A R B I T R A G E FOR G E R M A N C O M M E R C I A L B A N K S 3 - M O N T H T R E A S U R Y B I L L S , I N T E R B A N K L E N D I N G RATE A N D E U R O - D O L L A R D E P O S I T RATES ; J 1 A V RATE D I F F E R E N T I A L A N D v F O R W A R D DEUTSCHE MARK S P R E A D I N F A V O R OF F R A N K F U R T - 1—: 1 1 i r T T T I RATE D I F F E R E N T I A L W I T H F O R W A R D E X C H A N G E C O V E R (NET I N C E N T I V E ) t/ I IN FAVOR O f L O N D O N E U R O - D O L L A R S 1965 SHORT-TERM INTEREST RATES * •VI | CANADA iV^IA- and Swiizerland ^3-month depcin role) g«n 6 L O N G - T E R M BOND YIELDS INDUSTRIAL STOCK INDICES litis Kilt rv- ** Jopan index of 2 2 5 industrial a n d ol her h o c kt traded on the Tokyo exchange SPOT EXCHANGE RATES — - M A J O R — CURRENCIES AGAINST U.S. DOLLAR A b o v * P°f 1 wuk; | j j 1 FRENCH F R A N C v i i B E L G I A N FRANC i ^ 1 | A Below par Above par 1 - / / ^ 1 DUTCH GUILDER ! 1 I 1 M . ! M 1 ! 1 ! 1 1 1 1 1 1 1 1 1 1 1 1 1 Below par .» 4; "AU tJ V YA ! ^ ) , 1 C A N A D I A N DOLLAR " < " 11 1 1 ! ! I I 1 19 43 1 1 .4 - - „ JAPANESE Y I N 1 - i i i 1 9 64 i i i i ! - II II II 1*65 T . I Y> 3 - M O N T H F O R W A R D E X C H A N G E RATES FrU«y A G A I N S T .U.S. D OLLARS P«r c m l A G A I N S T POUND STERLING - L O N D O N PREMIUM + A G A I N S T P O U N D STERLING - L O N D O N FRENCH FRANC 196$ P»1 annum H.13 No. I8I4. February 2h, II. Per cent per annum Chart 1 Upper panel Chart 5 17 Treasury Euro-$ deposit bills: U.S. M l U.K. 6.32 Germany M i Canada 3.62 U.S. certif. of deposit Lower panels (Thurs. , Feb, 11 Treasury bills: ) U.S. M i U. K. 3.86 Swiss 3-month deposits (Date: Jan. 1$ ) Canada M i Euro-$ deposit (London) 3^6 U.S. kJJL Canada Japan: composite rate (Date; Oct. 30 ) 7.990 M l Finance Co. paper: Hire-purchase paper, U.K. Chart 6 Bonds: Feb. 19 Treasury bills: ) Canada 3.62 U.S. govt. (Wed., Feb, 17 U.19 U. K. war loan (Thurs., Feb. 18 6.17 German Fed. Railway (Fri. Feb, 19 6^9 Swiss Confederation (Fri., Feb, 12 h.ok Canadian govt. (Wed. Feb. 10 5,oi Netherlands government perpetual (Fri day, Feb. 12) 1.95 U.S. Spread favor Canada _0^2_ Forward Canadian dollar *0.11; Net incentive (Canada +) -0.l8 Chart 3 Feb, 19 Treasury bills; M l Lio Chart 2 (Friday, Per c e n t p e r annum (Friday, Feb. 19 except as noted) (Wednesday, (Friday, 1965 Latest Figures Plotted In H.13 Chart Series ) U.K. W l U.S. Spread favor U. K. + 2.38 Forward pound -2,85 Net incentive (U.K. +) -o.hl For description and sources of data see special annex to H. 13 Number 164, September 23, 1964. W"
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