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D I V I S I O N OF I N T E R N A T I O N A L F I N A N C E
B O A R D OF # O V E R N O R #
F E D E R A L RESERVE SYSTEM
H-13
No. 252
June 15, 1966
CAPITAL MARKET DEVELOPMENTS ABROAD
I.
II.
III.
Germany
Ten Charts on Financial Markets Abroad
Latest Figures Plotted in H.13 Chart Series, 1966
I.
Germany:
Capital Markets, March-May 1966
In the period under review, interest rates advanced steadily in Germany
as a result of the combined upward pressure exerted by the continued tightening
of the liquidity position of the banking system and the persistently strong demand
for bank credit. As a result, the gap between money market rates and the Bundesbank's discount rate--which had remained at 4 per cent since August 1965--continued
to widen, as did the gap between short- and long-term rates. (See Table 1.)
In order to bring the interest rate structure into better balance the Bundesbank,
in a widely anticipated move, raised its discount rate from 4 to 5 per cent and
the rate on advances from 5 to 6-1/2 per cent with effect from May 27. Bank
lending rates were increased following the discount rate increase and deposit
rates are expected to go up shortly.
(per cent per annum and DM billions, monthly average)
Jan.
Feb.
Mar.
Apr.
May 26
June 3
Discount rate 1/
4.00
4.00
4.00
4.00
4.00
5.00
Call money
4.12
4.49
5.12
5.36
4.94
6.00
3-month loans
4.99
5.24
5.56
6.02
6.13
6.50
6% Public authority
bond yield
7.59
7.54
7.65
7.91
7.99
8.03
Discounts at the
Bundesbank (DM
billions)
5.75
5.57
7.43
7.25
7.03
JL/ End of period.
a/ May 23.
b/ May 31.
Source: Deutsche Bundesbank; Frankfurter Allgemeine Zeitung.
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(Decontrolled after six months)
y
7.33
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-
2
-
Prior to the discount rate action, which was virtually dictated bymarket conditions, the Bundesbank had relied on liquidity tightening policies
to keep credit expansion in check. The deficit in the balance of payments was
one of the most important factors in this connection. Reserve losses totaled
$213 million in March and April and continued into the first half of May. The
factors contributing to the deficit appear, however, to be changing somewhat.
Last year, the shrinking trade surplus was the leading factor behind the payments deficit. This year, the trade balance is improving but a more than
seasonal deterioration of the tourist account, and diminished private capital
inflows have kept the balance of payments in deficit.
Over the past few months, the effects of the Bundesbank's restrictive
policy have been increasingly felt. The bond marke L continues to be seriously
affected and it once again became necessary to declare an issue pause for new
public authority loans because the loss of investor confidence in the bond
market kept funds from entering the market despite the high prevailing rates.
The stock market has also been weak for months and has afforded little opportunity for fund raising. Consequently, increasing financing traffic has gone
directly through banking and investment institutes. This led to an unusually
large expansion of short and medium-term bank loans in the first quarter.
Increasing demand has tightened conditions further in these ranges and borrowers
have reportedly been offering more than 9 per cent interest on medium-term
notes.
The instability in the bond market and the upward movement of yields
on funds obtained outside the market are largely attributable to the persistent
heavy financing needs of the public authorities which continue to seek funds
regardless of cost. The Federal Government, in recognition of these facts,
has prepared a "Conjuncture-Stabilizing" bill, which attempts to ensure that
public spending flows will, as much as possible, affect the economy in a
counter-cyclical manner. Under this bill, the Bundesbank's power to act
effectively would also be expanded, partly through the ability to freeze funds
of the public authorities and the social security funds, partly by an increase
in the Bank's scope for open market operations and finally through new creditlimiting powers.
Conditions on money market tighten further
Monetary conditions tightened further during the
the process was apparently continued in April and May. As
market rates rose steadily. In the second and third weeks
day-to-day loans eased momentarily only because of heavier
in anticipation of an increase in the discount rate.
first quarter and
a result, money
of May, rates for
discounting by banks
The withdrawal of liquidity from the banking system took place as the
Bundesbank allowed the February-April deficits in Germany's balance of payments
and the collection of March tax payments to proceed without supplying any offsetting additions to bank liquidity. Consequently, the average rate for day-
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- 3 -
to-day loans rose to a level 1-3/8 per cent above the then prevailing discount
rate of 4 per cent in the first week of May. The increased margin between the
money market and discount rates, and the substantially expanded gap between
long and short-term rates following a rise of bond yields to more than 8 per
cent at the end of April, led to widespread anticipation of an upward adjustment
of the discount rate. The initial failure of the Central Bank Council to take
any discount action when market conditions appeared to dictate such an action
led to considerable nervousness in financial markets. The money market consequently moved erratically from day-to-day in tj^e first half of May as banks
hedged against the awaited increase in the discount rate.
Bond market required another issue pause
Expectation of a discount action had been heightened by the rise of
yields on public authority bonds to a high of 8.14 per cent at the end of April
as the unabated pressure of public authority demands for financing led to a
further demoralization of investor confidence. Banks, traditionally one of the
largest investor groups, added virtually nothing at all to their portfolios
during the first quarter. The bond market consequently weakened again from
March through May following the brief consolidation in the first two months of
the year.
The major capital market borrowers decided, therefore, at their May 5th
meeting to close the bond market to new public authority issues through the end
of June. This pause is the third issue stop on public authority bonds to have
been declared in the past twelve months. But on this occasion public borrowers
were also requested to refrain from taking up promissory loans (Schuldscheindarlehen) or other longer-term credits unless severe liquidity deficiencies"made
that absolutely unavoidable. This additional step was taken because the substantial growth of business in Schuldscheindarlehen during the bond market's
weakness has itself contributed further to this weakness by drawing away loanable
funds.
Although public authority borrowing averaged DM 314 million per month
during the first quarter, a somewhat greater amount than that taken up a year
ago, total gross borrowing on the bond market averaged only DM 1.2 billion per
month, or DM 0.5 billion less than the average gross amount raised in the first
quarter last year. (See Table 2.) Total bond flotations in April were sharply
reduced from the first quarter average. The inability of the bond market to
function orderly, even though the total issue volume was substantially reduced,
reflects not simply the effects of the liquidity squeeze but suggests further
the extent to which the weakness of the bond market has become a matter of
confidence. This is also reflected in the growing use of Schuldscheindarlehen,
(loans placed directly with banks and secured by promissory notes) by which
capital flows by-pass the bond market. According to one of the leading German
financial newspapers at least twelve such loans ,totaling an estimated DM 250
million,were raised during the first quarter. So far this year these loans
have carried coupons of 7 to 7.5 per cent, with effective yields of more than
8 per cent. Outside the banks and the bond market, finance-hungry borrowers
are offering large insurance companies more than 9 per cent for the use of
investment funds.
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- 4 -
To encourage the public authorities in their restraint and to help
brighten the mood of the bond market, the Federal Government announced that it
would borrow np more on the bond market this year.
The remaining DM 200 million
which it still needs will be raised later in the year in the form of medium-term
notes. By the end of 1966, furthermore, the Federal Government will have injected
a net total of DM 447 million into the capital market; its total borrowing will
be DM 550 million (including the resale of securities which it had acquired
during last year's support operations), while scheduled redemptions will total
DM 997 million.
Table 2.
Germany: Gross Placements in Securities Markets, 1965-April 1966-1/
(millions of DM, month or monthly average)
1 9 6 5
I
"Occasional" borrowers bonds:
Industrial
Public authorities
Foreign issuers
Other bonds 2/
86
303
193
333
Total
Mortgage and communal bonds
Total gross bond placements 3/
Gross share placements
Total security placements at
issue value
19
IV
_n_
90
380
43
181
--
694
I
16
290
171
- 141
314
102
215
1069
618
631
199
37
833
6 6
Apr.
no 3o
853
570
628
522
571
1768
1264
1697
1140
1202
239
349
472
260
291
244
2007
1613
2169
1400
1493
798
' n, a.
=====
1/ Market value.
2/ Mostly bonds of specialized credit institutions.
3/ Includes medium-term notes (Kassenobligationen) <,
Source: Deutsche Bundesbank.
Upward'adjustment of discount rate
The need to realign the various interest rates and the uneasiness of
financial markets put an end to the Bundesbank hesitation to take a discount
rate action. On May 27, the Bundesbank raised its discount rate from 4 to 5 per
cent and its rate on advances against securities (Lombard rate) from 5 to 6-1/4
per cent. The Bundesbank's selling rates for money market paper were adjusted
accordingly: the rates for Treasury bills and storage agency bills were increased
by 1 per cent each, while rates of non~interest-bearing bonds of all maturities
were raised by 1/2 per cent.
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- 5 -
The Bundesbank had apparently hesitated at first to raise the discount *
rate, despite the technical nature of the move, on the grounds that an upward
adjustment of the interest rate structure was neither necessary nor desirable
for either domestic or international reasons. Liquidity tightening measures
were considered a more direct and efficient a means of damping domestic
demand pressure than discount rate adjustment. Furthermore, it was feared that
an upward adjustment of interest rates would lead to a further upward spiraling
of rates on the bond market and to irrreasc;! cr.pi r,'l i if lows. These hesitations
appear to have been offset in the end, however, by the shrinking of private
capital inflows in the first quarter of the year, by discount rate increases
elsewhere,and L d i e need to quiet the nervousness of the German financial markets.
Persistent price increases and recent signs that economic tensions were increasing
again instead of easing off as indicated earlier undoubtedly helped firm the
Bundesbank's decision.
The raising of the advances (Lombard) rate to 6-1/4 per cent increased
the margin between the discount and Lombard rates from the traditional 1 per
cent to 1-1/4 per cent. The sharper increase of the advances rate reflected
the recent substantial expansion of Lombard credits. Many banks are approaching,
or have already reached.their rediscount ceilings as rediscounting at the
Bundesbank rose from DM 5.75 billion in December 1965 to DM 7.65 billion in the
first part .of May. As a result recourse to Lombard credit - which is not
limited, increased from DM 163 million to DM 903 million during the period.
Access to this form of credit has now become considerably more expensive.
Bank lending and deposit rates are now expected to advance further.
The upward adjustment of the discount rate automatically raised the permissible
level of interest which banks may charge on loans. Interest maxima have risen
from 7 to 8 per cent for discountable paper and from 8-1/2 to 9-1/2 per cent
for other paper and cash loans. Although bank lending rates to prime customers
are known to have been below the previous maxima, they have reportedly been
coming increasingly closer to them. Rates charged other customers are appropriately closer to the permissible maximum. Given the stringency, of credit
conditions and the demand for funds, some advance in rates is to be expected
in this area.
Following the increase in the discount rate, the Federal Banking
Supervisory Office recommended an increase in maximum bank deposit rates to
become effective July 1st, if approved by the banks. Banks reportedly had
already been paying more than the permissible maximum on some accounts. The
increase in depositor rates will bring the basic savings rate (for accounts
with an agreed period of notice of less than 12 months) from 3-3/4 to 4-1/2
per cent. Accounts with a period of notice of 12 months to 2-1/2 years
will now receive interest of 5-1/2 rather than 5 per cent. The continued
control of interest rates on accounts with notice periods of up to 2-1/2
years comes as a disappointment to banks, which had hoped that controls would
be abolished for notice periods of over one year. Interest rates have been
freed, however, on accounts of DM 100,000 or more having a minimum deposit
period of three months. When banks meet with the Supervisory Council in June
to discuss the proposed action, questions are anticipated on the freeing of
interest rates on large deposits of over three months while interest controls
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-
6
-
are maintained on other time deposits of up to 2-1/2 years notice= On the whole,
however, the Supervisory Office's recommendations are expected to be accepted
as proposed.
The upward adjustment of the interest rate structure will place added
pressures on mortgage and bond rates, Savings banks are expected to find it
necessary to increase their rates on both new and outstanding mortgages and
maintenance of the 7 per cent coupon rate on bonds may become even more difficult.
Fiscal developments
The German Parliament approved a 1966 budget of DM 68= 9 billion, down
from the initial DM 69.7 estimate, after a prolonged trimming process. This is
an increase of 8 per cent over last year's estimates and of 4 per cent over last
year's actual expenditures=
In addition to cutting expenditures, the Budget
Committee also shifted DM 900 million from the credit-financed extraordinary
budget to the tax-financed ordinary budget.
•J
The Government will shortly introduce a "Conjuncture-Stabilizing" law
in Parliament, the core of which involves a commitment by the Federal and Laender
Governments to coordinate their spending as much as possible in a counter-cyclical
pattern to the developments in the economy. This is in part to be accomplished
by having the Federal and Laender Governments establish special reserve accounts
at the Bundesbank in times of high demand; these reserves would be drawn down in
times of slack demand, The law further provides that the Federal Government
formulate a five-year budget plan; Laender budgets are to take the expenditures
of the municipalities into account and work towards the overall desired fiscal
effect. Other provisions of the law would empower the Federal Government to
limit the amount of borrowing of public authorities without seeking the approval
of the Bundesrat (Upper House). to speed up tax payments,and to vary depreciation
rates according to the economic climate.
The Bundesbank would be empowered to place ceilings on bank credit
expansion which could be differentiated on the basis of r -.<= nature and the maturity
of the credit granted and the type of lending institution
Such credit ceilings
could be imposed for one year only with the possibility of :n extension for
another year. Violators would be obliged to put an interest-free deposit equal
to the amount of overlending at the Bundesbank for the maximum of a year. In
addition, the social security funds could be required to put
a certain
portion of their investible funds ("depending upon their preceding year's investment level) into money market paper at the Bundesbank
Further, the Minister of
Finance would be required to provide the Bundesbank with Treasury bills and bonds
for open market operations under certain conditions, the amounts involved have
not been specified as yet,
Continued tendency towards payments deficit
The tendency to deficit in the German balance of payments continued to
contribute £t> the liquidity drain on the banking system throughout the period.
In January the unwinding of window-dressing operations led to a large improvement
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of commercial banks' net foreign exchange positions,
(See Table 3.) But in
February, March, and April, combined foreign exchange losses of the commercial
banks and the Bundesbank totaled $253 million and further losses were recorded
through the first half of May.
Table 3.
Germany: Changes in Reserve Position
(in millions of U.S. dollars)
19 6 5
il
Apr.
A.
Bundesbank gold and
foreign exchange
Gold
/
Foreign/exchange
Total
B.
Drawing rights on IMF
C.
Commercial banks net
foreign exchange
Total A through C
19 6 6
Sept,Dec o
Jan. Apr.
Feb.
Mar.
e/
Apr.-
- 5
-140
138
-752
28
114
8
-302
- 4
-47
- 4
- 14
-78
-145
-614
142
-310
-51
- 18
-78
- 35
186
12
34
10
10
502
-154
-310
324
11
-121
-16
322
-582
-156
48
-40
-129
-84
e/ Estimated.
Sources :zz/Bj)indesbank Monthly Report and International Financial Statistics o
Although the overall picture has changed little, there are some
indications that the factors behind the deficit are changing. The 1965 deficit
arose almost entirely as a result of the large expansion of imports which led,
in turn, to a marked deterioration of the trade balance. The slower growth
of imports and the more rapid advance of exports in recent months have led,
however, to an appreciable strengthening of the trade balance. The continued
tendency toward deficit in the first quarter arose primarily from an unseasonally early and substantial weakening of the tourist account, from increased
official payments (as compared to those of the first quarter 1965) and from
a deterioration in the private capital balance.
(See Table 4.) A substantial
net outflow of short-term capital, the first in months, occurred in March and
preliminary reports indicate there may have been a small outflow rather than
the usual inflow of private capital in April,
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Table 4.
Goods and Services
Trade balance
Services
Total
2.
Official Payments
Donations
Long-term capital
Short-term capital
Total
3.
Private Capital
Long-term
Short-term 2/
Errors and omissions
Total
Surplus or Deficit (-)
8
-
Germany: Balance of Payments, 1965-March 1966
(in millions of D M ) ^
I
1.
~
1 9 6 5
II
III
IV
Jan.
1 9 6 6
Feb.
Mar.-
287
- 80
1098
2
46
- 789
- 453
- 852
604
45
185
1096
- 835
-1305
649
A
-1349
- 172
138
-1778
- 334
• 49
-1359
- 735
620
-1333
- 502
421
-461
-215
—89
-477
- 15
52
-492
80
-168
-1383
•2161
-1474
-1414
-587
-440
-580
410
273
1041
522
• 12
1358
514
303
527
540
236
- 715
429
513
796
-139
128
125
111
-269
- 80
1724
1868
1344
61
1738
114
-238
1437
1128
-1435
704
1216
-102
-611
3,72
- m
Z r
207
1/ Preliminary.
_2/ Includes commercial bank capital other than net foreign exchange assets.
Sources: Basic data from Bundesbank and International Financial Statistics rearranged
by author.
DM strengthens in exchange
markets after discount increase
The foreign exchange quotation for the DM weakened generally after the
beginning of the year as the deficit in Germany's balance of payments reemerged.
Except for a brief strengthening in March, when banks pulled in funds to meet
demands related to the tax date, the rate for the DM continued to slip downward
on the foreign exchange market.
(See Table 5.) This tendency continued through
the first week°of May. Anticipation and reaction to the discount rate increase
caused the rate for the DM to strengthen during the rest of the month although
it still remained below its par value.
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9 -
(in U.S. cents per DM and per cent per annum)
Upper limit
Lower limit
Par value
Spot
Ratal'
January
25.188
24.875
25.00
Forward
Rate
Spot
Ratal/
Forward
Rate
24.926
+0. 28
February-
24.904
+0.22
13
24.891
-0.01
March
24.914
+0.04
20
24.897
-0.06
April
24.902
+0.03
27
24.916
-0.38
May
If
Noon buying rate in New York.
Source: Federal Reserve Board.
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6
24.878
+0.03
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
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
|
EURO DOLLAR OVER
U . S . C E R T I F I C A T E OF D E P O S I T
F I N A N C E C O . PAPER RATES ( c o v e r e d ) : QUOTED I N NEW YORK
CANADIAN FINANCE
COMPANY
U . K . H I R E PURCHASE
rv/
U.S. FINANCE COMPANY
Mar.
Sept.
1964
Dec.
Mar.
Jun.
1965
Sept.
Dec.
Mar.
Jun.
1966
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 ,
EURO D O L L A R D E P O S I T RATES
VU
Friday (igurss
9 0 DAY
i 1
180 DAY
Wx_jfv
A
I I
1
1
I I
1
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1
1
1
1
1
1
1
1
HIRE PURCHASE 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 e r e d )
Friday ligorei
HIRE PURCHASE
I
I
DIFFERENTIAL
OR HIRE PURCHASE
FAVOR EURODOLLAR
L O C A L T I U T H O R I T Y DEPOSIT
DEPOSIT
I
I
DIFFERENTIAL
|
1
'
\w
1
1
1
1
1
1
1
1964
1
>
1
1
FAVOR LOCAL AUTHORITY
A.
1
1
1 I V
^ V V A V O R EURO DOLLAR
1
1965
I
I
I
I
I
1
1
L 1 I" L 1 1
1966
(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 I C H / L O N D O N j
FRANKFURT INTERBANK L O A N
RATE VS. L O N D O N E U R O - D O L L A R T A T E ( C O V E R E D )
N TERMS OF D M _
INTERBANK LOAN RATE
EURODOLLAR
r
T
.DIFFERENTIAL
FAVOR FRANKFURT
FAVOR EURODOLLAR
Z U R I C H D E P O S I T RATE "Vs. L O N D O N EURO D O L L A R RATE ( C O V E R E D )
I N TERMS
•SWISS F R A N C S
EURODOLLAR
xXv;
I
SWISS DEPOSIT RATE
DIFFERENTIAL
1
FAVOR ZURICH
FAVOR EURODOLLAR
n
PRICE OF G O L D I N L O N D O N
35.2
35.0
1964
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
3 - M O N T H TREASURY BILL RATES
CAN. FIN. CO.lPAPER
CANADA
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
S P R E A D I N F A V O R OF C A N A D A
PREMIUM
V R
i
FORWARD RATE
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 )
DISCOUNT
FAVOR CANADA
PRIME FINANCE PAPER
FAVOR U.S.
FAVOR CANADA ~
TREASURY BILLS
FAVOR U.S.
1963
1964
1965
1966
INTEREST A R B I T R A G E , N E W Y O R K / L O N D O N
Friday figures
3 - M O N T H T R E A S U R Y BILL RATES
LONDON
U.K. LOCAL AUTHORITY DEPOSITS
NEW YORK
RATE D I F F E R E N T I A L A N D 3 - M O N T H
FORWARD STERLING
I
I
I
2
S P R E A D I N F A V O R OF L O N D O N
PREMIUM
f
0
DISCOUNT
FORWARD RATE
2
"yi/, /
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 F A V O R OF L O N D O N
I N 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.
SWITZERLAND
JAPAN
GERMANY
CANADA
U.S.
1962
*
1963
1964
1965
3 m onth Ireoiyry bill r o l n for oil counlrm n o p l Japan ( A y r g g t rote on bonk loons ond diicounli)
Switzerland|{3-monlh depoitl ralej and Ge r many (interbank Loan Rale)
3-month rote for U S dollar depoiili in London
1966
L O N G - T E R M B O N D YIELDS
GERMANY
EURO DOLLAR BONDS
U.S.
CANADA
NETHERLANDS
U.S.
SWITZERLAND
1962
1963
1964
1965
1966
SPOT EXCHANGE 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
GERMAN MARK
U.K. S T E R L I N G
BELGIAN FRANC
FRENCH FRANC
DUTCH GUILDER
CANADIAN DOLLAR
I T A L I A N LIRA
V
JAPANESE Y E N
M
J
S
1964
S
0
1965
0
M
1
1966
s
D
3 - M O N T H F O R W A R D E X C H A N G E RATES
Friday figure*
A G A I N S T U. S. D O L L A R S
PREMIUM
GERMAN MARK
SWISS FRANC
POUND STERLING
DISCOUNTA G A I N S T P O U N D STERLING - L O N D O N
PREMIUM
M
S W I S S FRANC
- G E R M A N MARK —
. A : r
v
, ^
—
U. S. D O L L A R
V
DISCOUNTA G A I N ST P O U N D S T E R L I N G - L O N D O N
^
DUTCH GUILDER
BELGIANFRANC
FRENCH FRANC
M
J
DISCOUNTS
1964
D
M
J
1965
S
D
s
M
1966
D
| Chart 10
I N D U S T R I A L STOCK INDICES
300
SWITZERLAND
250
GERMANY
200
US
150
100
300
250
JAPAN
200
CANADA
150
100
1963
^ ^
1964
Swin Bank Corporation industrial stock index
Japan: index of 225 industrial and other stocks traded on the Tokyo exchange
1965
1966
June 1d, 1966
H. 13
No.252
III: Latest Figures Plotted in H.13 Chart Series, 1966
(all figures per cent per annum)
Upper Panel
Chart 1
(Wednesday,
June 8
)
Euro-$ Deposit
5.69
U.S. certif. of deposit
5.46
Lower Panel
(Friday,
June 10
Finance co. paper:
U.S.
Canada
Hire-purchase paper, U.K.
Chart 2
(Friday, June 10
Treasury bills:
5.38
5.62
5.95
Interbank loan (mid-point)
i
1
l
1
(Date:
-0,, 79
Net incentive (U.K. +)
+0.,22
4. 54
5, 55
4. 94
Interbank loan rate (German)
6, 55
Euro-$ deposit (London)
5,
Zurich 3-mo. deposit
(Date:
Mav 15
Japan composit rate
(Date:
Feb, 28
7?
)
4. 06
)
7. 570
)
4„ 73
U.K. War Loan (Thurs..June 9 )
6. 90
German Fed. (Fri. ,
7 c87
U.S. Gov't. (Wed., June 8
)
Mav 15
)
U.S.
U.K.
Canada
Chart 7
6 55
6.25
Zurich 3-mo. deposit
Price of gold
(Friday, June 3
Forward pound
5.75
5.94
Hire-purchase paper
6.03
(June 2)
Local-authority deposit
5.65
(June 3)
Chart 3
Upper Panel
(Period: June 1-7
)
Lower Panel
+1,,01
Chart 6
(Friday, June 10
)
90-day
180-day
i , 55
4,= 54
U.K.
U.S.
Spread favor U.K.
Treasury bills:
5.38
5.56
5.69
)
)
Euro-$ deposits:
Call
7-day
30-day
Chart 5
(Friday, June 10
4.06
35.133
June 3
)
Swiss Confed. (Fri., June 3 )
3o 95
Canadian Gov't.
5. 72
)
Chart 4
(Friday,
June 10 )
(Wed..June8)
Netherlands Gov't perpetual 37»
(Friday, June 3
)
5, 94
6. 45
Canada
U.S.
Spread favor Canada
4,94
4. 54
40. 40
Euro-$ bonds (Fri.. June 10 )
Forward Canadian $
-0. 17
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, 13
@FedFRASER