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PLY.WMof mTewrnOrional finance . board of oovbrnors OF THE H. 13 No. 248 May 18, 1966 j CAPITAL MARKET DEVELOPMENTS ABROAD I, II, I. 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 YORK, LONDON, MONTREAL: YIELDS FOR U.S. DOLLAR INVESTORS ON 3 - M O N T H FUNDS DOLLAR DEPOSIT RATES: NEW Y O R K - L O N D O N EURODOLLAR DEPOSIT 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 FINANCE CO. PAPER RATES ( c o v e r e d ) : QUOTED IN NEW YORK CANADIAN FINANCE COMPANY U.K. HIRE PURCHASE U.S. FINANCE COMPANY Sept. 1964 1965 I Sept. 1966 L O N D O N : YIELDS FOR U.S. DOLLAR E U R O - D O L L A R D E P O S I T R A T E S fc/TJ INVESTORS ON 3-MON,TN~FUNDS 9 0 DAY 1 8 0 DAY x_y i — CALL 3 0 DAY HIRE P U R C H A S E AND LOCAL AUTHORITY DEP-O-SIT R A T E S ( c o EURO-DOLLAR DEPOSIT HIRE PURCHASE r DIFFERENTIAL T LOCAL A U T H O R I T Y DEPOSIT j EURO-DOLLAR DEPOSIT r 1 DIFFERENTIAL FAVOR LOCAL AUTHORITY FAVOR EURO-DOLLAR 1964 1965 1966 INTEREST ARBITRAGE: FRANKFURT INTERBANK FRANKFURT/LONDON, LOAN RATE VS. ZURICH / LONDON LONDON EURO-DOLLAR IN RATE ( C O V E R E D ) TERMS OF DM I N T E R B A N K L O A N RATE EURO-DOLLAR ! r T . DIFFERENTIAL T FAVOR FRANKFURT L I ZURICH DEPOSIT 1 \ — J .! RATE VS. 1 I. ; LONDON f T EURO DOLLAR i 1 RATE ( C O V E R E D ) IN TE R MS7o> SWISS~F"RANCT EURO-DOLLAR SWISS DEPOSIT RATE 1 r DIFFERENTIAL FAVOR ZURICH FAVOR E U R O - D O L L A R n PRICE OF G 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 , UNITED S T A T E S / C A N A D A 3-MONTH TREASURY BILL RATES CAN. FIN. CO.iPAPER CANADA — ^ UNITED STATES BILL RATE D I F F E R E N T I A L AND FORWARD C A N A D I A N DOLLAR SPREAD IN FAVOR OF CANADA ! 3-MONTH COVERED PREMIUM DISCOUNT ! FORWARD RATE 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 ) PRIME FINANCE PAPER AAJ \ A FAVOR C A N A D A j FAVOR U . S . _ FAVOR CANADA TREASURY BILLS FAVOR 1963 1964 1965 1966 INTEREST A R B I T R A G E , 3-MONTH TREASURY NEW BILL YORK/LONDON RATES LONDON U.K. LOCAL AUTHORITY DEPOSITS NEW YORK ] RATE D I F F E R E N T I A L . A N C) 3 - M O N T H FORWARD - - - • • | STERLINC ' 1 : SPREAD IN 1 A V 0 R OF LONDON J ! 1 j ; ! J 1 ! I ! i i 5 DISCOUNT i1 1 ORWA RD RA 1TE i ; 1 1 l L | | " i. j i i n j . i i . L L 1 1 1 RATE [ PREMIUM J T \ Y y ' ! 1 1 __i_L DIFFERENTIAL WITH 7 O W A R D T X C H A N G E T O V E R (NET INCENTIVE) IN FAVOR OF LONDON IN FAVOR OF NEW YORK 1963 1964 1965 1966 SWITZERLAND Jop on fAveroge Switzerland (3 month deposit rote) discounts) L O N G - T E R M B O N D YIELDS GERMANY EURO-DOLLAR BONDS U.S. Ill CANADA NETHERLANDS U.S. SWITZERLAND 1962 1963 1964 Average of yieldi for four foreign government dollar bonds quoted in London 1965 1966 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 1.6 S W I S S FRANC 1.2 .8 .4 GERMAN MARK .4 U.K. STERLING ! .8 BELGIAN FRANC FRENCH FRANC .8 .4 DUTCH GUILDER .4 CANADIAN DOLLAR ITALIAN LIRA JAPANESE YEN S 1964 D s M 1965 D M S 1966 D 3 - M O N T H FORWARD EXCHANGE RATES Friday figures AGAINST U. S. DOLLARS PREMIUM GERMAN MARK SWISS FRANC I V I POUND STERLING , DISCOUNTAG A I N ST POUND STERLING - L O N D O N i\\ SWISS FRANC - G E R M A N MARK U. S. DOLLAR DISCOUNTAG A I N S T POUND STERLING - L O N D O N A DUTCH GUILDER BELGIANFRANC) FRENCH FRANC DIS COUNT — S M 1964 D M J 1965 s D S M 1966 D INDUSTRIAL STOCK INDICES |958:|00 Ratio »col« SWITZERLAND GERMANY 300 250 JAPAN 200 I CANADA J""' 150 100 1963 1964 Swui Bonk Corporation industrial stock index 1965 1966 w May 18, 1966 H. 13 No. 248 II. Latest Figures Plotted in H.13 Chart Series, 196 6 (all figures per cent per annum) Upper Panel Chart 5 (Friday, M a y 1 3 Chart 1 (Wednesday, May 11 Treasury bills: Euro-$ Deposit U.S. certif. of-deposit Lower Panel (Friday, 5,, 33 ) May 11 U.S. Canada Hire-purchase paper, U.K. Finance co. paper Chart 2 (Friday, Mav i3 5, 3ft 7 ft 6.09 s. 11 s so ^ ai 90-day 180-day 5 88 Interbank loan (mid-point) 6,12 Euro-$ deposit (average) 5.76 (Date: Price of gold (Friday, Apr. 22 Spread favor U.K. -+9,90 -0.72 Net incentive (U.K. +) 40.18 ) Interbank loan rate (German) 6 1? Euro-$ deposit (London) 5 75 Zurich 3-mo. deposit (Date: March 15 Japan composit rate (Date: F e b r u a r y 28 ) 4r 00 ) 7„ =7 70 Chart 7 U.S. Gov't. (Wed., May 11 ) 4. 4-00 German Fed. (Fri., Apr. 29 ) 8.22 35.131 Swiss Confed. (Fri., May 6 ) 3. 94 (Wed. , May 11) 5 64 Canadian Gov't. Netherlands Gov't perpetual 37. (Friday, May 6 ) Treasury bills: Canada U.S. Spread favor Canada u +n 3fl Forward Canadian $ -0, 17 Net incentive (Canada +) +0. 21 i 49 4 97 6. 86 ) Chart 4 (Friday, Mav 13 Canadian finance paper ) U.S. U.K. Canada U.K. War Loan (Thurs. , May jj) March 15 Zurich 3-mo. deposit 5.49 4,5? Forward pound Treasury bills: Hire-purchase paper a i^ (April 22) Local-authority deposit 5.51 (April 29) Chart 3 Upper Panel (Period: Mav 9-15 ) Lower Panel U.K. U.S. Chart 6 (Friday, Mav 13 ) Euro-$ deposits: Call 7-day 30-day ) 5,99 Euro-$ bonds (Fri., Mav 6 6, 12 ) For descriptions and sources of data, see special supplement to H.13, Number 239, March 16, 1966.
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