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BOARD OF aOVEMNOIW 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 H. 13 No - March 21*, 1965. 168 CAPITAL MARKET DEVELOPMENTS ABROAD I. II. III, I. United States ' -1 . Nine Charts on Financial Markets Abroad Latest Figures Plotted in H. 13 Chart Series, i ? (.•!;> U.S. Dollar Assets in Foreign Financial Centers, January 196U-March 1965 Recent Developments Rates on U.S. dollar deposits in financial markets abroad rose dramatically during the first ten days of March, following the announcement of programs to restrain lending abroad by U.S. banks and foreign investments by U.S. corporations. Between February 26 and March 10, bid rates for dollar deposits in foreign financial institutions increased within a range of from 13 basis points on call (2-day) funds to 62 basis points on 30-day dollars• (See Table 1, and Chart 1.) Although later in March rates retreated from the March 10 peaks, most rates still remain close to all-time high levels. Bp contrast with the rise in rates for dollar deposits, yields on long-term dollar-denominated bonds quoted on European exchanges showed little change Table 1. U.S. Dollar Deposits in London vs. Certificates Deposit in New York (rates: per cent per annum) Rate Sept. 25, 196k Euro-dollar deposits Call 3.88 7-day LwOO 30-day U.06 90-day k.19 180-day U.U* Changes from proceeding date U.19 U.31 U.62 U.88 5.12 (Sept. 30, (Jan. 3.88 3.98 +.27 +.27 Euro-dollars over CD's 90-day 756 180-day •U6 % r .31 196U) Cert, of Deposit 90-day 180-day (Mar, 17) 6) -.01 +.01 +.11 +.06 +.01 +.03 Difference between rates 136 133 .90) .30 IU3 Source: Federal Reserve Bank of New York Rate Mar. 19, 1965 OFFICIAL USE ONLY (Decontrolled after 6 months) +.02 +.01 .72 .61* k. 28 U.36 OFFICIAL UoE ONLY - 2 - until late in March when the market experienced some tightening and prices of many of the non-convertible issues eased below their previous lowest quotations. (See Table 10, page 13,) It is uncertain whether the higher rates on foreign dollar deposits reflected actual withdrawals by U.S. residents of funds held with foreign institutions or were merely in anticipation of possible large-scale future withdrawals» The greatest movements have been in the rates on 30- to 180day maturities. Since decreasing dollar availabilities (caused by a current withdrawal of funds) might well be expected to put banks under immediate liquidity pressures, the limited rise in the short maturity deposit rates may indicate that recent rate movements were more anticipatory in character than they were in response to actual market conditions. The rapid rise in Euro-dollar deposit rates over the past few weeks came at a time when rates on time certificates of deposit in New York changed little, (See Table 1 and Chart 1.) Because of this divergent movement, the differential between 90-day Euro-dollar deposit rates and 90-day CD's in New York rose from 37 basis points at the end of February to 86 basis points on March 10, the highest yet recorded. Reacting to the increasing need for commercial banks to offer higher rates on dollar deposits, the Japanese Ministry of Finance on February 2k raised the recommended rates that the Japanese foreign exchange banks may pay on U,S« dollar deposits, The recommended limit on 1- to 6-month deposits was raised 1/8 percentage point and on deposits for 1 year and longer, l/U percentage point. Prices of outstanding ILS> dollar bonds quoted in London eased significantly between March 5 and 19; the City of Oslo, £-3/1* per cent bond, for example, dropped $2,62, raising its yield to iik.uwity more than 20 basis points, (See Table 10, page 13.) An exception is the IRI (Istituto per la Eicostruzione Industrials) bond—an issue with attached common stock warrants— which has posted a sharp price rise„ Some Japanese issues quoted in European markets which have convertible features have been drifting lower in line with lower stock prices in Tokyo, The volume of new issues of dollar bonds floated in European capital markets in the January-March period has been limited, A Norwegian power consortium issued $2% million of 5 - 3 A per cent bonds in London, and the Italian Cassa per il Mezzogiorno sold $20 million of 6 per cent bonds that have been listed in London and Luxembourg, (See Table 2.) Although the coupon rates on these issues were about in line with the rate on bonds offered last year by these countries, yields were slightly higher because issue prices were slightly lower: the Italian bond had a 6.22 per cent yield to maturity and the Norwegian issue a 6.20 per cent yield, OFFICIAL USE ONLY OFFICIAL USE ONLY Table 2. U.S. Dollar Bonds; Borrower - 3 - New Issues in Europe, Jan.-March 1965 Coupon Price Term (yr) Amount ($ mil.) Market 5.75 97.75 20 25 London 6. 0 97.50 20 20 London Luxembourg 5.5 98.00 20 30 London Luxembourg (%) January Sira-Kvina Kraftselskap (Norwegian power consortium) February Cassa per il Messogiorno (development fund for South Italy) March Kingdom of Norway The scaling down of the most recent dollar i s s u e — o n e for the Kingdom of Norway--to $30 million from the unusually large amount of $40 million which had originally been announced reflects mainly the sudden tightening of supplies of Eurodollars in Europe and the considerable state of flux in the market. This 5-1/2 per cent,20-year bond was originally hailed as "the largest and most important dollar loan launched in London for European markets. 11 A new feature of the bond is that a proportion is being placed with certain institutions in the United Kingdom, although Hambros Bank (the United Kingdom underwriter) has spread the underwriting fairly broadly among Continental institutions. However, on what terms other issues currently in the pipeline--some delayed considerably from their original schedules and some recently announced like the $25 million issue for the City of Rome--will come to market remains to be seen. In this vein, The Economist recently commented that "competition for the issuing business between London and New York is keen; interest rates are likely to rise; and it is unusually difficult to predict whether the total volume of these loans will rise or fall from its recent high level. n -V Deposit rates abroad for U.S. dollars trend upward during 1964 The recent sharp increases in Euro-dollar deposit rates took place on top of a generally upward trend in the entire maturity of rates that persisted throughout 1964.—' (See Table 3 and Chart 1.) Relatively tighter conditions in the world's major financial centers, heavier demands for funds growing out of generally higher economic activity, and rising interest rates in the United States contributed to push up foreign deposit rates for dollars last year. 1J The Economist, (London), March 27, 1965. Page 1419 2/ Euro-dollar rates eased in January and February 1965 from their year-end peak in December as European banks returned funds they had temporarily withdrawn for end-year window-dressing purposes and the flow of U.S. funds into the foreign dollar market reportedly increased in anticipation of the recent restraints by U.S. authorities on resident funds. OFFICIAL USE ONLY OFFICIAL USE ONLY Table 3, Euro-dollar Deposit Rates (London)s During (Rates; per cent per annum) Changes Charges from previous date Rate Rate Jan. 31, 196U Mar, 27 June 26 Sept. 25 Nov, 20 Dec, 2U Jan, 15 Call (2-day) 3.6? + .12 +.19 -.12 -.07 + ,07 0 U»06 7-day 3.81 +.19 + .31 -.31 -.06 + .68 -.50 U.19 30-day 3.9k +,12 +.32 -.32 0 +,75 ~a56 lw31 90-day L,08 +.17 +.13 -.19 L,25 +.19 0 180-day 0 . Feb, 5: 1965 +.31 +.25 -.31 lw5o + .06 +.31 -.19 b*hk Source; Federal Reserve Bank of New York During the first half of 19&hs bid rates for dollars in London rose within a range of from 19 basis points on 180-day deposits to 50 basis points on 7-day funds, (See Table 3.) At this time, short-term money rates were rising in the major European centers: in Frankfurt and Zurich by about UO basis points <, in London by 60 basis points and in Paris by much more. (See Table U.) The rise in Britain followed a rise in Bank Rate by 1 per cent in March. The particularly sharp rate rise in Paris in May was due GO a severe scarcity of funds in Paris which induced French banks to borrow short-term Euro-dollars heavily in April-May; because these inflows led to heavy and unwanted reserve accruals9 however.the French authorities quickly eased these pressures in early June, Money conditions also tightened in Switzerland as the authorities sought to keep out foreign money inflows and to absorb domestic funds from the Swiss market as an anti-inflationary move, (See Table iu) During this period, rates in the call (2-day) to 90-day maturity range increased rather sharply; for a short time in June,, in facte, financial institutions abroad bidding for dollars were willing to pay almost as much for 7- to 90-day dollars as they were for 180-day deposits, (See Appendix: Table 1.) In addition, the disparity between U.S. domestic rates and foreign rates grew widers on 90-day funds this difference widened from 2h basis points on January 29 to 53 basis points by the end of June in favor of Euro-dollars, In this period«, rates offered by U.S. banks were close to the ceiling fixed by U»S, authorities» (See Table 5») OFFICIAL USE ONLY - 5 - OFFICIAL USE ONLY Table 4. Short-term Interest Rates in Selected New - York y 1964 January February March April May July August September London — 2/ f u r a f i z v Paris — ^ 3.32 3.33 3.50 3.51 3.52 3.46 3.45 3.46 3.43 3.47 3.50 3.61 3.77 4.16 4.16 4.21 4.32 4.42 4.50 4.50 3.70 '. 3.92 4.10 3.45 3.64 3.69 3.75 4.13 4.33 5.04 5.05 Zurich ^ C a n a d a ^ 3.67 Euro-$ London 4,06 4.04 4.26 4.75 2.98 3.01 3.19 3.31 3.38 3.42 3.19 3.14 3.24 3. 71 4.24 4.22 6.18 4.86 4.77 4.72 3.72 3.78 3.67 3.60 3.47 3.52 3.70 4.23 4.21 4.36 4.42 October 9 23 3.56 3.56 4.53 4.59 5.38 5.50 4.18 4.00 3.50 3.50 3.59 3.63 4.50 4.50 November 13 27 3.56 3.79 4.53 6.41 5.50 5.44 4.06 4. 18 3.68 3.68 3.59 3.78 4.50 5.00 December 11 25 3.80 3.84 6.41 6.41 5.50 5.31 4. 12 3.88 3.75 3.75 3.74 3. 76 4.69 4. 75 January 8 22 3. 77 3.81 6.44 6.41 3.75 4.06 4.00 3.00 3.31 3.19 3.71 3.63 4.50 4.44 February 11 3.89 6.32 4.00 4.12 3.06 3.61 4.50 March 5 12 19 3.93 3.91 3.90 6.26 6.20 6.35 4.75 4.00 3.94 3.06 3.06 3.69 3.63 3.56 4.75 5.00 4.88 1965 - 1/ 2/ 3/ 4/ 5/ 11 a.m. Friday offer rate on 90-day Treasury bills. Opening Friday offer rate on 90-day Treasury bills. 90-day interbank loan rate. 3-month deposit rate at large Zurich banks. Average of rates for the week previous to reporting date; reported on 7, 15, 23 and last day of month. (3/ Day-to-day money against private paper; average of rates on Thursday each week. _7/ Friday bid rate for 90-day U.S. dollar deposits in London. January-September: monthly averages. OFFICIAL USE ONLY OFFICIAL USE ONLY Table 5, ' ' Euro-dollar Deposit Rates vs. New York Certificates of Deposit " (per cent per annum) * 196U Feb. _A_ Nov. -21 U.12 3.88 "TSE k,38 3.85 -33 U.50 3.95 -35 U.88 U.12 U.50 ~T% U.iU U.50 U.lU -35 U.25 u.uu L.56 U.05 131 5.00 U-33 157 U.62 It.26 -7jS U.56 U.26 .30 Euro-dollars over CD's 90-day Euro-S Deposit 90-day CD Difference 180-day Euro-# Deposit 180-day CD Difference Source: 1?65 Oct. 28 Jan, 29 3.97 T2B June 3.95 "IB Jan. -iL Federal Reserve Bank of New York After mid-year, conditions eased in the Euro-dollar market; only in the 180day maturity did rates not decline• But rates climbed to record levels in late Decembers unsettled monetary conditions surrounding the sterling crisis in November intensified - seasonal pressures for year-end window dressing. Between November 20—just before sterling's troubles intensified—and December 2U, deposit rates for dollars in the London market rose in a range from 75 basis points on 30-day deposits to 25 basis points for 90-day money. Call rates, however, were practically unchanged, (See Table 3«) Again rising domestic rates in European centers added to demands for Euro-dollar deposits, In London, the emergency rise in Bank Rate from 5 to 7 per cent on November 23 raised borrowing costs by at least 2 percentage points« In Frankfurt, the end of large external payments surpluses and a 10 per cent increase in reserve requirements produced credit stringency, and a dramatic increase was registered in short-term interest rates: the 90-day interbank loan rate rose sharply from a monthly average of 3.70 per cent in July to around 5*30 per cent in December. (See Table h») Even though U.S. commercial banks were allowed to pay higher rates on their certificates of deposit beginning November 2U, I96I4, increases were not enough to keep pace with the sharp rise in foreign dollar deposit rates. On November 26, at the height of unsettled international money conditions, 90-day Euro-dollar deposits were bid 76 basis points above U.S. commercial bank certificates of deposit. However, the disparity between the two rates was quickly reduced in early 1965 to only 12 basis points more than it had been a year earlier. (See Table 5.) OFFICIAL USE ONLY OFFICIAL USE ONLY - 7 - London dollar business grows sharply in 1961; Business in U.S. dollar deposits in London experienced renewed growth in 1961;, after contracting slightly in the fall and winter of 1963-61; in reaction to several corporate bankruptcies in which Euro-dollar credits were involved appreciably. Between December 31, 1963 and December 31* 1961;, Eurodollar business in London!/ (as measured by total U.S. dollar assets and liabilities of banks in the United Kingdom vis-a-vis foreign residents) rose 37 per cent from $5»9 billion to $8.1 billion* Almost half this growth in business ($963 million) occurred between September and December, while a smallers but still very large, increase ($756 million) was registered in the third quarter, (See Table 6), Table 6, U»K, Commercial Banks; External U.S. Dollar Claims and Liabilities (millions U.S. dollars) 1963 196U End. of periods Liabilities Claims Dec, 62 June Dec, Mar. June Sept. 2SU75 3,010 3,002 3,097 3,U19 3,892 2,2L3 2,783 2.870 2,817 2,937 3,220 3,696 227 227 132 280 I4.82 672 683 Net Liabilities Dec* Changes in; Liabilities —— +535 -8 +95 +32 2 +U73 +1*87 Claims " +535 +87 -53 +120 +283 +U76 0 -95 +UU8 +202 +190 +11 Net Liabilities Sources Bank of England, Quarterly Bulletin* 1/ Many foreign financial centers trade in (accept and place) U e S e dollar deposits, but today London does by far the largest volume of the dollar business. The Bank for International Settlements estimated that, at the end of September 1963, one-third of the total outstanding assets and liabilities were with British overseas banks, merchant banks or branches of foreign banks in London, OFFICIAL USE ONLY OFFICIAL USE ONLY Table 7. U.K. Commercial Banks: External U.S. Dollar Claims and Liabilities by Country (millions U.S. dollars) C L A I M S 1 9 6 4 Dec. 63 March United States 795 1,072 Italy 484 Japan France Germany End of Period: Switzerland (% of total claims) 986 1,184 1,210 +415 330 350 361 454 - 30 246 277 302 347 389 +143 151 118 165 157 174 + 23 182 106 134 157 280 + 98 73 84 129 120 157 + 84 193 174 118 109 182 - 11 87 67 87 104 104 + 17 (77%) (79%) (77%) (79%) (80%) 624 736 806 997 750 +126 L I A B I L I T I E S Switzerland Change Dec. '63Dec.'64 Dec. Netherlands Belgium ON Sept. TO United States 384 319 490 493 534 +150 Canada 356 375 470 521 739 +383 Middle East 300 291 339 347 392 + 92 Austria 224 202 199 230 221 - Italy 3 146 92 73 134 204 + 58 France 95 73 62 118 210 +115 Germany 50 132 67 80 70 + 20 (72%) (73%) (75%) (7o of total liabilities) Source: (73%) Bank of England, Qnarfprlv R n T l p M n . OFFICIAL USE ONLY (71%) OFFICIAL USE ONLY 9 During the second quarter, most of the dollar funds coming to London were from U.S», Canadian5 and, to a smaller extent, Swiss residents. This was at a time when the spread of Euro-dollar rates over U,S, rates widened from earlier levels. The British banks put most of their dollar placements during this period with French, Dutch and Japanese residents«, (See Table 7«) During the third quarter, about half of the dollar inflow into London came from Switzerland ($191 million), In this period, the Swiss authorities were encouraging Swiss banks to place funds abroad» London-resident banks placed $198 million of these dollar deposit gains in the United States» (See Table 7») The very large inflow of dollar funds into the London market in the final quarter of the year came primarily from Canadian ($218 million) and French ($92 million) residents» At the same time London-resident banks made large dollar placements on the Continent, particularly in Germany and Italy, (See Table 7») For the year 196U as a whole, banks in the United Kingdom (both British and branches of foreign banks) were recipients of dollar deposits (increased their dollar liabilities to non-residents) amounting to $1,377 million» (See Table 6») But dollar claims of these same banks against non-residents increased by only $826 million» Consequently, it appears that U.K. banks converted somv $55>1 million of these dollar inflows into sterling (presumably with forward cover) x'or investment in the London money market, in response to tightening domestic credit conditions; these inflows helped to finance the large current account deficit the United Kingdom incurred in the first three quarters of 1961;» During the fourth-quarter sterling crisis, however, the London banks employed virtually their entire dollar accruals as dollar—not as sterling—investments abroad. The $826 million increase in the foreign dollar assets of London-based banks were placed, or lent, primarily in the United States, Japan, and Germany, During 196U, in fact, more dollars were shifted to the United States from the London market than were placed in London by U.S. residents« The increase in dollar liabilities of U.S. residents relative to their dollar assets vis-a-vis London amounted to some $265 million, about $180 million of which occurred in the second half of the year, (See ^ b l e 8 e ) These flows largely represented the activities of London branches of U,S* banks, which added substantially to their dollar borrowings in Londor and then transferred appreciable amounts of these funds to their head offices, During much of this period, it was attractive for U.S. banks to borrow short-term money in the Euro-dollar market and to obtain longer-term funds by placing certificates of deposits (CD's) in the domestic market. This was because call Euro-dollar rates were lower than the rates on available certificates of deposit in the United States, while the longer-term CD rates tended tc. b below the corresponding Euro-dollar quotations. Among the other principal recipients of dollars from London, both Japanese and German residents took more dollars from London than they placed in London during the year, Favorable terms for placing money-market assets in U,S, Treasury bills offered to German commercial banks by the Bundesbank probably accounts for much of the shift in the position of German residents in the London market, On the other hand, Italian banks put more dollar funds into London than they borrowed, thereby OFFICIAL USE ONLY - 10 — OFFICIAL USE ONLY Table 8. Net Borrowers Major Net Borrowers and Lenders of Dollars in London (millions of U.S. dollars) Dec. 1963 Residents of: Net U.S. Dollar Liabilities to London Banks Changes I II III _iv_ Dec. . 1964 United States 411 +342 -257 +195 - 15 676 Italy 338 -100 + 39 - 50 + 23 250 Japan 235 + 31 + 22 + 42 + 42 372 Germany 132 -158 + 93 + 10 +133 210 Belgium 123 - 25 - 53 - 3 + 31 73 Netherlands (8) + 22 + 28 + 5 - 10 37 Net U.S. Dollar Assets in London Banks Net Lenders Residents of: Canada 286 + 36 + 98 + 59 +218 697 Switzerland 537 +132 + 50 +174 -247 646 Middle East 264 - + 20 + 45 322 + 31 - 23 199 + 64 ^ + 75 36 Austria France J./ 2/ 3/ 4/ 216 (56) 7 - 17 + 11-^ - - 58 ~ Net asset position. Net liability position. Decrease in net dollar liabilities in London. Increase in net dollar liabilities in London. Source: Bank of England, 8 Quarterly Bulletin. OFFICIAL USE ONLY 0 OFFICIAL USE ONLY - 11 - decreasing their net borrowing in that market, (See Table 8,) This reduction reflected the continuing pressures put by the Bank of Italy upon Italian commercial banks since the autumn of 1963 to reduce the total volume of their outstanding net liabilities to foreigners (that is, mainly their borrowings in the Euro-dollar and other Euro-currency markets), At the same time, Italian banks reduced their foreign currency loans to domestic residents as the value of Italian imports declined sharply throughout most of 196k» The principal supplier of dollar funds to the London market during I96I4. was Canada, Canadians added $Ull million to their net dollar claims on Britishbased banks during the year and $218 million during the fourth quarter alone* (See Table 8,) These flows may in part have represented the passing on of dollar deposits received by Canadian banks from U.S. residents; however, Canadian residents also added some $5)00 million to their bank balances and other short-term funds abroad during 196b* and some of these funds may have found their way to the London market* Well over half this $500 million is reported by the Dominion Bureau of Statistics to have been "swap deposits" under which Canadian banks offer residents an attractive rate of interest on foreign currency deposits (with the exchange-risk covered); because Canadian banks pay "commons agreed rates on their Canadian dollar notice deposits", they compete very aggressively with each other through these foreign currency swaps *1/ During the first three quarters of 196k, Swiss residents built up their dollar deposits in London on a net basis by more than $356 million5 but a withdrawal of more than 2 quarter of a billion of dollars in the fourth quarter during the sterling crisis reduced the total increase for I96I4. to only $100 million» The other two large net lenders of dollars to London—the Middle East and Austria—made only minor changes in their holdings during the year» 2/ Issues of long-term dollar bonds up sharply in 196qT Some $U90 million of long-term U,S* dollar bonds—almost 200 per cent more than in 1963—were issued in foreign capital markets by non-residents in I96U, (See Table 9») Nearly three-fourths of these were arranged by London underwriters» The volume of U„S» dollar bonds was slightly more than half the total volume of all bonds issued in European canital markets by non-residents during the year. The major issuers were the Scandinavian countries of Derjnark, Norway, and Finland, These countries took a little over half of the long-term uollar funds raised in European centers during 196I4., Japanese borrowers issued bonds for about one-fifth of the total funds raised, and bonds placed by an Italian firm and EEC organizations accounted for most of the remaining issues„ (See Table 9«) Terms offered investors in new foreign dollar issues showed little change over the year, Most Japanese bonds carried coupon rates between 6.25 and 6,50 per cent; 1/ Rp.nort of the Royal Gmmia^ioyi op Tfonking and Finance (Queen's Printer, Ottawat 19%), p, 138. 2/ Also see Charles C, Baker£ '-Foreign Security Issues in European Markets, 19&3-6ksu mimeographs June 1.65 196k, OFFICIAL USE ONLY OFFICIAL USE ONLY Table 9* «• 1 2 — U»S» Dollar Bonds Issued in Foreign Markets (millions U*S. dollars) 196U Quarters Borrowing Country Japan Israel Austria Portugal Denmark Norway Finland Italy EEC agencies Total I II 1IL _£L Total 22.5 5.0 18,0 37*5 10.0 U2.0 —— —— —— —— —— —— —— 2U.0 L2,0 20,0 U8.0 15.0 —— —— 5o,o 25,0 16,0 —— —•*» 112.0 5.0 18.0 20.0 122.0 107.0 26,0 25.0 55.0 W I 5 —— 25.0 10,0 25.0 —— llBTo ill ,5 —— 55,0 135TO coupon rates on most other new issues were about a percentage point lower—varying generally between 5.25 and 5»75 per cent. Discounts from par in the initial offering prices of new issues were, also, fairly common during the year—and seem to have primarily reflected the credit standing of the individual borrowers« Yields on outstanding non-resident dollar bonds traded in London varied only slightly during the year except for some Japanese issues, which, because of their convertible features, suffered sizable price declines in line with falls in Tokyo stock prices* (See Table 10.) However, the London market for dollar bonds is very thin and is not generally open to U„K« residents; hence, price behavior there does not necessarily respond quickly to changes in financial conditions, Europe and British Commonwealth Section, OFFICIAL USE ONLY Table 10. Issue 1964 1965 Gov't of Austria 6%, 1979-1984 HiRh Low 103.62 101.25 101.75 100.0 Price Last Friday of: January 1965 February March 5 19 1964 1965 101.38 101.50 101.75 100.00 5.8 5.8 5.7 5.9 Mort. Bk. Denmark 5-5/8%, 1970-1984 High Low 101,38 99.50 100,25 98.25 Price Last Friday of: January 1965 February March 5 19 Yield to maturity 100,00 100.25 100.00 98.25 Yield to maturity 5.5 5,5 5.5 5.7 Prices and Yields of Selected U.S, Dollar Bonds Traded in London Gov't of Denmark 5-1/2%, 1970-1984 Low High 103,62 100,38 102.12 98.25 Price 101.00 102.12 102.00 98.25 Yield to maturity 5.3 5.2 5,2 5.6 Copenhagen Telephone 5-3/4%, 1970-1984 Low High 102.62 100,12 99,75 102.25 Price 101.12 102.00 102.25 99. 75 Yield to maturity 5.6 5.5 5,5 5.7 Prices are bid. OFFICIAL USE ONLY 13 IRI 5-3/4%, 1975-1979 Low 105.75 105,5 Price 106,00 109.50 109.50 112.00 Yield to maturity 5.0 4,5 4,5 4.1 Itoh 6-1/4%, 1984 High 100,0 100.25 Price 96.50 96.25 95.75 91.25 City of Oslo 5-3/4%, 1969-1979 Low High 101.25 103.0 98.38 101.12 Yield to maturity Price 100.50 100.62 101.00 98.38 Takeda 6%, 1984 Low 98.5 100.0 94.75 91.25 Yield to maturity 5.6 5.6 5.6 5.8 Price 6.7 6.7 105,00 106,50 105,50 7.2 100.00 Yield to maturity 5.4 5.4 5.4 5.8 1U Appendix: Table I Bid Rates for U.S. Dollar Deposits in London T E R M Call 7-day 30-day 90-day January February March April May June 31 28 27 24 29 26 3.69 3.75 3.81 3.69 3.75 4.00 3.81 3.88 4.00 3.81 3.88 4.31 3.94 3.94 4.06 4.00 4.12 4.38 4.08 4.12 4.25 4.19 4.25 4.38 4.25 4.25 4.44 4.38 4.38 4.44 July 10 31 3.88 3.88 4.00 4.00 4.25 4.12 4.38 4.31 4.44 4.44 August 14 28 3.88 3.75 4.00 3.88 4.12 4.12 4.25 4.25 4.44 4.44 11 25 3.81 3.88 3.94 4.00 4.12 4.06 4.25 4.19 4.50 4.44 16 30 3. 75 3.88 3.94 3.94 4.06 4.00 4.50 4.50 4.56 4.56 6 3.75 3.81 3.81 no market 3.94 3.94 3.94 no market 4.00 4.06 4.06 5.00 4.50 4.50 4.50 5.00 4.56 4.56 4.50 5.00 18 24 31 3.88 3.75 3.88 3.88 3.88 4.00 3.88 4.44 4.62 4. 12 4.75 4.62 4.75 4.81 4.62 4.75 4.69 4.75 4.75 4.62 4.81 4.75 4.81 4.81 4.75 15 22 29 3.88 3.88 4.00 4.00 4. 12 4.12 4.12 4. 12 4.38 4.25 4.25 4.31 4.50 4.44 4.44 4.50 4.62 4.62 4.56 4.56 19 26 4.06 4.06 4.06 4.06 4. 19 4. 19 4.25 4.25 4.31 4.31 4.38 4.38 4.50 4.50 4.56 4. 56 4.44 4.54 4.60 4.68 5 10 12 19 26 4.19 4.19 4.19 4.19 4.12 4.38 4.62 4. 38 4. 31 4.31 4.62 5.00 4.88 4.62 4.62 4. 75 5.12 5.00 4.88 4.88 4.82 5.25 5.12 5.12 5.12 1964 September October November 13 20 27 4 11 1965 January February 5 12 Source: Federal Reserve Bank of New York. 180-day INTERNATIONAL 3-MONTH EURO MONEY MARKET YIELDS DOLLAR DEPOSIT VS. SELECTED I N T E R N A T I O N A L Fridoy figures CANADIAN FINANCE MONEY FOR U.S. CERTIFICATE RATES DOLLAR OF INVESTORS DEPOSIT INTEREST A R B I T R A G E , U N I T E D STATES / C A N A D A Friday figures* MONTH BILL TREASURY BILL RATES I RATE D I F F E R E N T I A L A N D 3 - MONTH COVERED Per c e n l per annum RATE FORWARD CANADIAN DIFFERENTIALS (NET DOLLAR INCENTIVES) INTEREST ARBITRAGE, NEW YORK/LONDON 3 - M O N T H T R E A S U R Y BILL RATES . LOCAL AUTHORITY DEPOSITS j j RATE D I F F E R E N T I A L A N D FORWARD LONDON 3 -MONTH STERLING •J " V \ RATE D I F F E R E N T I A L WITH FORWARD L.:.i EXCHANGE i.i : COVER (NET INCENTIVE) INTEREST ARBITRAGE 3 - M O N T H FOR TREASURY EURO-DOLLAR GERMAN COMMERCIAL BILLS,. I N T E R B A N K DEPOSIT LENDING BANKS RATE RATES _! AND I EURO-DOLLAR LONDON i j GERMAN INTERBANK ; L O A N RATE G E R M A N T R E A S U R Y BILLS , , -r R AT E D I F F E R E N T I A L , AND . • FORWARD ! I N T E R B A N K L O A N RATE : DEUTSCHE fMARK S P R E A D IN F A V O R OF F R A N K F U R T j F O R W A R D RATE | ' DISCOUNT TRIASURY B l t t S RATE DIFFERENTIAL WITH FORWARD EXCHANGE I N F A V O R OF F R A N K F U R T / \ / INTERBANK 1 0 A N RATE COVER < / ^ J (NET ; INCENTIVE} j ] SHORT-TERM INTEREST RATES # u. | k. r^-i CANADA L O N G - T E R M BOND YIELDS I N D U S T R I A L STOCK SWITZERLAND | INDICES ma-joo Ratio i t o l # S P O T E X C H A N G E RATES - M A J O R C U R R E N C I E S A G A I N S T U . S . D O L L A R A b o v e par Below pa Below /X par 3-MONTH FORWARD EXCHANGE R A. 1 £ S Friday figures AGAINST U.S. DOLLARS AGAINST POUND STERLING Per cent per a n n u m - LONDON SWISS FRANC I AGAINST POUND STERLING - LONDON L_L_L March 2h> 1965 H.13 No. 188 III. Latest Figures Plotted In H.13 Chart Series, 1965 Per cent per annum Chart 1 Upper panel (Wednesday, March 17 Chart 5 (Friday, March 19 , except as noted) ) Euro-$ deposit 5.00 U.S. certif. of deposit li.28 Treasury bills: Lower panels (Friday, March 19 Treasury bills: ) U.S. -±L 3i22_ U.K. 6.35 Germany 3_112_ Canada 3_t£6_ U.K. -±L Canada 1L Euro-$ deposit (London) L88_ Japan: composite rate (Date: Nov. 27 ) 7J220 U.S. Canada (Revision: March 12 Hire-purchase paper, U.K. (Friday, March 12 ) Chart 2 (Friday, March 19 •1.72 Bonds: ) Canada 3.56 U.S. 3.90 -0.3li Forward Canadian dollar +oJa Net incentive (Canada +) +0.07 Chart 3 (Friday, March 19 ) U.K. U.S. 3_tQ£_ Chart 6 82 Spread favor Canada Treasury bills: U.S. Swiss 3-month deposits (Date: Feb. 1$ ) Finance Co. paper: Treasury bills: Per cent per annum 3^20. Spread favor U.K. U. S. govt. (Wed., March 17 k.JJ_ U. K. war loan (Thurs., March 18 6^2_ German Fed. Railway (Fri., March 19 6.63 Swiss Confederation (Fri., March 5 3t2L Canadian govt. (Wed., March 17 5JSL- Netherlands government perpetual (Friday, Feb. 26) Mar. 5 ) iu5T" series ended. Forward pound -2.79 Net incentive (U.K. +) -0.29 Digitized forFor FRASER description and sources of data see special annex to H. 13 Number 164, September 23, 1964.
@FedFRASER