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DIVISION O F 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 GOVERNORS
H. 13
No, D49
May 20, 1961*.
CAPITALJARKET DEVELOPMENTS ABROAD
I, Unite^nCingdonT
II, Nine Charts, on Financial Markets Abroad
I.
United Kingdoms
Money and Capital Markets in April 196b
British securities markets reacted strongly to the large budget, deficit
for the fiscal year 196U-65, which was announced on April 15. The stock market
overcame the sluggishness which set in after the February 27 increase in Bank
•rate, and stock prices once again approached the high levels reached at the
beginning of the year. The bond market was depressed, with yields rising to over
6 per cent for long-term and undated issues. (See Table 1 and Chart 6.) There
was virtually no reaction to the bi^iget in the money market.
Table It
United Kingdom: Selected Money Market Indicators, I96I4
~ (In per cent per annum)
~~
~~~
MONEY MARKET
Bank rate
Treasury bill tender
COVERED ARBITRAGE
-™Tfavor U.k7)~"
U.ZTyUTS: Treasury bills
SECURITIES PRICES
"{April 10, 1952=100)
Industrial stocks
Long-term Government Bonds
GOVERNMENT BOND YIELDS b/
W
1957
5%
1971
5-1/256
2008-12
2-l/2%
Consols
EXCHANGE RATES
SpotTTlLS, cents)
3-month forward
discount
Jan. March
3
6
~3
1,00
3,72
5.00
W o
5.00
1,30
-olU
-j 02
JL17.5 1 1 3 . 6
109,2 IO5.-9
U.72
5.06
5.88
5,77.
5.08
5.U1
6.05
5.97
-ill
April
10
17
5.00
U.30
-..OU
113.8 113.8
107.5 107.1
U.30
U.30
-..OS
-.03
->03
116.2
106.5
116.9
105.2
6.05
279,73 279.88 279.88 279.85 279.87 279.97
280.00
-.77
-.76
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(Decontrolled after six months)
5.00
5.39
116.8
IO5.3
6.0U
Weekly averages.
Previous Thursdays.
5.00
5.00
1.30
U.95
5.39
-.66
U.95
5.3U
5.95
5.89
5.00
May
1
U.97
5.U1
-,2U
U.95
5.30
5.88
5.83
\_2U_
6.00
6.00
-.76
6.10
-*76
6.10
-.76
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— 2
—
The announcement on April 9 that the general election will not be held
until Autumn contributed to the bouyancy of the stock market, This factor also
contributed to a firming of the spot rate in the foreign exchange market. The
pound regained the 280,00 U.S. cent parity on May 1. (See Table 1.) However,
the discount on the 3-month pound was unchanged,
The overall budget deficit estimated for the 196U-65 fiscal year
(commencing on April l) is £791 million, compared with the £U78 million deficit
realized under the "expansionary" budget for 1963-6U and the £56 million
deficit realized under the "neutral" budget for 1962-63. (See Table 2.) Some
£165 million of the estimated £313 million increase in the deficit reflects the
inclusion in the new budget of Treasury borrowings to finance capital expenditures
of local authorities which these bodies had hitherto borrowed in their own
name.' Even if this sum is excluded from the budget total, however, the expected
196U-65 deficit would still amount to £626 million. Despite official efforts
to raise funds outside the gilt-edged market, the prospective Treasury cash
needs had a dampening effect on bond yields.
On May 2, in its first financing operation in the current fiscal year,
the Treasury issued a £14.00 million long-dated tap issue: a 5-3/U per cent
Funding Loan, 1987-91. Apparently the Government chose a long-term issue
primarily because the government broker is reported to have already on hand
supplies of issues in the short-term range (the U per cent Exchequer Stock,
1968) and in the medium-term range (the 5-l/U per cent Funding Loan, 1978-80)•
As has been done with other new government bond issues in recent years, the
Funding Loan has been made attractive to foreigners by making it available in
bearer form and by exempting non-residents from withholding taxes deducted at
.. source,
Sterling, which began to display a stronger tone in mid-March,
continued to improve in April. Reserves in April increased by $53 million.
However, the U.K,'s deteriorating trade balance (resulting from a more rapid
increase in imports than in exports) suggests the possibility that sterling
is presently being supported by an overseas sterling area payments surplus with
non-sterling countries« ;
Bank lending has continued to rise along with the rapid business
expansion. Loans by the London clearing banks are estimated to have increased
in April by about the same amount as in March (seasonally adjusted): £17 million.
Exchequer finance. The Treasury will have to raise large sums to
finance the estimated £791 million deficit. It has already taken action to raise
a substantial portion of the Government's cash requirements outside the giltedged market.
In particular, the Government has made non-marketable Government debt
obligations more attractive to the public. A "National Development Bond" will
be offered on May 15 with a 5 per cent coupon as contrasted with the U-l/2 per
cent coupon currently offered on the Defense Bonds. Limits on the amounts of
National Savings Certificates and Premium Bonds that one person may hold are
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- 3 -
being raised from £300 to £600 and from £800 to £1000, respectively* In
addition, the Chancellor announced that the Treasury is working on a contractual savings program which "• • • will give an incentive for sustained
saving over a period of years." Proceeds from non-marketable debt amounted
to £309 million in 1960-61, £81; million in 1961-62 and £lU5 million in
1962-63.
Table 2. United Kingdom: Financing the Government*s
Budget-Deficit: 1960-61 through 196U-65 a/
(In millions of pounds)
1960-61 1961-62 1962-63
Actual Actual Actual
BUDGET DEFICIT
EXCHEQUER FINANCING
Extrabudgetary funds
External transactions
Bank of England
Non-marketable debt
Financing other than
by sales of marketable
debt
Marketable debt
Non-bank public
Banking sector
of which:
Bends
Treasury bills
Financing by sales of
marketable debt
TOTAL FINANCING
1963-6U
Actual
196U-65
Estimate
-178
zl21
-380
-236
100
-297
266
. 309
193
73
1U3
81+
75
23
-236
1U5
n.a.
n.a.
n.a.
n.a.
378
1*93
7
n.a.
577
-575
-199
58
66
-17
n.a.
(-306)
(-269)
2
380
(- 63)
(110)
( 5) (-127)
-257
236
U9
56
b/(+12)
n.a.
—L78«
-791
a/ Fiscal years end on March 31, but the figures for 1960-61 through 1962-63
are adjusted to coincide with the third Wednesday of March, the days on which
the London clearing banks prepare their balance sheet.
b/ London clearing banks only.
"
Money market. Money market conditions eased after March 31, with the
end of the tax-gathering quarter. However, some intermittent Bank of England
support was required in April, particularly towards the end of the month5
but the amount of Treasury bills purchases is reported to have been well-below
the purchases required in March. The Treasury bill auction rate remained at
U.30 per cent for ten consecutive weeks, from February 28 through May 1,
(See Chart 1.)
'
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- U -
Euro-dollar rates eased during April, particularly oil the short end*
The yield on call money fell from 3.81 per cent per annum on April 3 to 3.69 per
cent per annum on May 2U. On the other hand, three-months and six-months
deposit rates fell only by six points. They had remained unchanged from midMarch through April 3. (See Table 3 and Chart 2.)
Table 3. Yields on Euro-dollar Deposits in London
(In per cent per annum)
Feb*
Call
7-days
30-days
90-days
180-days
3*62
3*75
3.88
1*00
U*25
J&rch
13
3
3.81
U.00
U.12
U.25
U.UU
3.81
U.00
U.12
U.25
U.UU
April
10
17
3.75
3.88
U.06
U.25
u.uu
3.75
3.88
U.06
U.25
U.38
May
2U
1
8
3.69
3.88
U.00
U.19
U.38
3.69
3.88
U.06
U.19
U.38
3.75
3.88
U.06
U.25
U.38
In the local authorities market, short-term rates eased seasonally
after March 31. Towards the end of the month, rates became firmer. (See
Table 10 and Charts 1 and 5»)
The local authority mortgage market revived by mid-April after over
a month's inactivity due to uncertainties about the Public Works Loan Board
lending rates which were to come into effect on April 1. Since mid-April
considerable interest has been shown in mortgage loans repayable on one-month's
notice after a term of eleven months at a yield of 5 - 3 A per cent*
Arbitrage yield spreads. The covered U.S.-U.K. Treasury bill spread
and the differential between 3-months local authorities deposits (fully hedged)
and Euro-dollar deposits remained negligible in April* (See Table U and Chart 3.)
The uncovered Treasury bill differential, however, widened from 6U basis points
on March 26 to 73 basis points on April 2h, as the U.S. bill rate eased. (See
^
Table 10.) The gap between London Euro-dollar deposits and offering rates on
negotiable certificates of time deposits of prime New York banks widened,, since
the C/D rate fell while Euro-dollar yields held firm*
Bond market. Bond prices fell following the announcement of the large
'budget deficit, and the market remained weak throughout the month. The long
end of the market was more depressed than the short-end*. The yield on 2-1/2 per
cent Consols, for example, rose steadily from £.89 per cent on April 9 to 6*05
per cent on April 30. The yield on the 5 per cent Exchequer 1967 bond, on the
other hand, rose following the budget but then recovered its pre-budget level
by April 30. (See Table 11 and Chart 6.)
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- 5 -
The weakness in the long end of the market continued in the first
week of Maye This was, in part, a reaction to the new 5-3/U per cent tap issue
being offered at 97, giving this bond a gross redemption yield of 5.98 per
cent® This move led The Economist (May 2, 196k* pe 522) to observe that " e . •
the authorities for the moment think of 6 per cent as the right long-term
interest rate."
Table Uo U.K./U.S. Short-term Money Market Yields and Yield Spreads
(in per cent per annum)
Jan.
-3L
TIME DEPOSITS (3-month)
U„So dollars
#.#
NoYo - Certf. deposit
London • Euro-$
Sterling (covered)
Local authorities
Finance Houses
YIELD SPREADS (Favor U.K.)
Treasury bills (3-month) c/
Uncovered
~~
Covered
Euro—$ — NoYo C/D .a/
Euro-# - Local Authority
(covered)
21
Feb.
_28_,
1 9 6 U
Iferch
26
April
10
J3L
_A_
3.88 3.8U 3.8U
3-9U U.06 U.12
3.95
L.25
3.95 3.95
1.25 i.25
3.88 3.85,
U.25 U.25
3.97 U.01 1.53
3.85 3.85 U.35
Wil
U.20
5.06 ho 9k
u.20 U . 2 0
U.9U •Uo9U
U.20 U . 2 0
.60
.12
.13
—<»l8 -o25 -.09
.22
;22
•2U
•6U
-.07
.30
.66
.72
-.11 - o O U
.30
.30
.71
.73
-.05 -.03
.Uo
.37
.16
o0h. -.07
-.07 -.01
.13 - o i l
.22
a7 Previous Wednesdays. '
"
b/ Secondary market offering rates for negotiable certificates of time deposits0
"c/ UoSo and U0Ke bill rates are shown in Table 11, See also Chart 3«
Dollar denominated loans. Two major dollar bonds were floated in
London in April» Both were Danish loans, and both were placed privately—
entirely with Continental investors, it is believed. A $25 million Kingdom
of Denmark 5-1/2 per'cent 20 year issue was placed early in the month„ This
was the largest dollar denominated loan issue to be placed in London since
this type of lending began* Towards the end of April, a $10 million 5-3/U
per cent 20 year bond was placed for the Jutland Telephone Company. (See Table So)
Trading on this loan actually did not begin until May U.
Negotiations are reported to be taking place for the underwriting of a
$15 million bond issue by a Japanese corporation and of a $25 million Government
of Norway bond issue.
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Table 5«
-Issue
Date
15
23
February
6
17
13
March
10
2k
26
26
April
May
U*S0 Dollar Loans Floated in London, 1961+
Borrowers
January
6
h
Norges Kommunalbank
Government of Austria
Wofson Clore Mayer Corp*(Israel)
City of Oslo
Copenhagen Telephone Co* (Denmark)
Teijin Kabushki Kaisha (Japan)
Aktieselskabet Tyssefaldene (Norway)
C* Itoh and Co* (Japan)
Taisho Marine and Fire Insurance
Co* (Japan)
Kingdom of Denmark
Jutland Telephone Co* (Denmark)
^
- 6 -
Coupon
Maturity
5-3A£
6%
6-1/2%
197U-8U
1979-8L
1983-88
1979
1981
197U-8U
197U-8U
198 U
5-3A2
6-1/1$
6%
6 - W
(Common Stock)
5-1/2*
198U
xJ£8U
5-3A%
Value
($Mrs)
10 o0
18 „0
5o0
i5.o
12 o0
10.0
10,0
10*0
2.0
25.0
10*0
.
Stock market* After the budget was announced on April 15, stock prices
rose by nearly 2 per cent in the remaining hours of trading on that day* This
brought stock prices hack to the early January level* (See Table 12 and Chart 7»)
The sharp recovery followed a six week period of sluggishness as the Bank rate
change was interpreted as signalling a move on the part of the Government to
slow down the rate of economic expansion* The budget, on the other hand, was
interpreted as being expansionary; and the market revived accordinglyo
London clearing banks*
Bank lending to the private sector of the
economy has continued to expand although not as rapidly as it had earlier in
the fear: .Seasonally adjusted advances increased in April by the same amount
aS
It ^ a p e " : £17 milliono (See Table 6*) After the end of the first quarter3
whem bank liquidity was strained owing to the -seasonal increase in. loans and to
heavy tax payments, the liquidity ratio rose from 29*7 to 30oU per cent of
gross depositso
'
The limited Treasury borrowing from the banks explains the pressure
on bank liquidity that wasvexperienced last year, when the minimum customary
liquidity ratio was reduced from 30*0 per cent to 28.0 per cent in October 1963.
During the last three fiscal years, the London clearing banks reduced their
holdings of marketable government debt (including loans to the discount market)
by £82 million*
Instalment credit* New credit extended by department stores in
January and February declined less than seasonally, according to. the Board of
Tradeo (See Table 7 .) New credit extended by finance houses rose sharply«
These developments have accompanied increased consumer expenditure—manifested
in a rise in retail sales and expanding purchases of automobiles*
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Table 6«
- 7 ~
London Clearing Banks: Net Deposits and
April 1961 through April 196U
(In millions of pounds)
C h a n g e s
1961- 19621963Feb,
1962 1963
196L
Selected Assets,
"
~
; ! /
1 96 U
toirch
Outstanding
April 15iSpril
196U
LOANS TO PUBLIC vs.
PRIVATE SECTORS
Claims on Public Sector
Bonds
Treasury bills and loans
to the discount market
Exchequer finance
Loans to nationalized
industries
-90
+137
-U2
- 6U
+hk
-131
+12
-313
-1|6
+ 6
-30
-377
12
+ 11
- 8
+ 17
+L53
Total claims on
public sector
Claims on Private Sector
Advances (netJ 2/ ~L
Other
Total claims on
private sector
+58
—
+117
+191
SPECIAL DEPOSITS AT
BANK OF ENGLAND
+77
-220
LIQUIDITY RATIO (end period)
32,6 30.5
SEASONALLY ADJUSTED:
Deposits (net)
Advances 2/
+106
+58
+276
+U53
+k9
1,266
-91
+U9
2,315 '
+ 6
-10
- 8
60
Z#
-371
-101
+385
+52
+15U
- 7
+57
+I4.6
+ 7
+29
1,155
713
+U37
+1U7
+103
+36
k,868
--
M
--
——
--
29.7
29,9
29,7
30.U
+UU8
+385
-2L7
+ 65
+15
+17
17 Fiscal years commencing April 1,
2/ Excluding loans to nationalized industries,
3/ Preliminary,
1,079
-32
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3/ *79
1/ *17
2,105
--
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Table 7»
United Kingdom: Instalment Credit
(end of period)
Outstanding
196U
Jan. Feb. Feb. 29,
1962
Ifear
1963
Nov.
Dec.
139
91
1U5
129
1U0
157
1U5
129
~ 110
17 U
f 9
-h9
3Ho
+22
+15
^7
+ 5
+ 3
T"B
+11
- h
- 1
+ u
+ 3
New Credit Extended, Index
of value (1957=100)
Department stores
Finance houses
Credit Outstanding (£ millions)
Household goods shops
Finance houses
Total
—
107
18U
' - 1
+13
+12
338
631
959
Table 8, United Kingdom; Foreign Trade
(Millions of pounds; seasonally adjusted; monthly averages)
1st,
Qtr.
1963
2nd
3rd
Qtr. Qtr.
126
1U1
200
53
373
56
393
327
335
1961;
Uth.
Qtr.
Qtr^
Jan.-/ Feb.
1U8
1U3
150
157
151
1U3
209
220
233
233
231
235
57
I02-
59
H22
69
66
W!
66
H5o
Ik
3U6
3U8 b/356
373
f&rch
Imports, c.ioK
/
'
° — '
tobacco
Fuels and industrial
materials
Finished manufactures
and other
Total.a/
Trade balance,
balance of payments
basis c/
12
b/326
369
• 12
11
11
I,
Exports, f.o.b.
-R6-exports, f.o.b.
Trade balance,
. customs returns
"
13
_13
-36
-U7
-53
-61
b/-120
-70
-65
+ 7
- 2
- 9
-11 b/-35 b/ -73
-15
-17
b/ The January export figure is not comparable to those for other months owing
to a change in the technique of compilation.
c/ Customs returns adjusted for valuation and coverage, mainly revaluing imports
from a c.i.f. to an f.o.b. basis, I96L figures are preliminary and are subject to
substantial revisions.
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- 9 -
Foreign trade. The trade deficit was about as large in March as it
was in February. (See Table 8 , ) Imports in the first quarter of I96I4. have
leveled off * Imports of food, beverages and tobacco fell to the fourth quarter
1 9 6 3 level, out this was offset by increased imports of fuels and industrial
materials (associated with inventory investment) and finished manufactures.
Exports in March were maintained at the high level achieved in
February0 The February-March average was 6-1/2 per cent above the fourth
quarter level.
Foreign exchange market. Sterling has strengthened since mid-March,
and this has been reflected in a steady rise in the spot rate. (See Table 11
and Chart 8.) <• Sterling eased slightly in the first half of April, owing partly
to uncertainties about the budget, but the spot rate continued its upward
trend in the following week, reaching 280.00 on May 1, The three-month forward
discount remained steady at 0.76 per cent per annum throughout April.
(See Table 10 and Chart 9.) The investment dollar premium fluctuated between
11 and 11-1/2 per cent in April.
Gold and foreign exchange reserves. With the strengthening of
sterling in the foreign exchange markets, the United Kingdom's reserves
increased by $3U million in March and $53 million in April, bringing total
gold and foreign exchange reserves up to $2,713 million on April 30. (See
Table 9»)
British drawing rights with the International Monetary Fund have
remained virtually unchanged in recent months, as there have been few transactions in sterling* As of March 31, U.K.'s IMF drawing rights amounted to
$2,UU0 million.
Table 9. United Kingdom: Reserve Position
(in millions of U.S. dollars)
1963
Year
Dec.
A.
Gold and convertible
currencies
Less: Central bank loans
Less: U.S. opns, in
sterling b/
Adjusted Reserves
B. Drawing rights on IMF
Total
Changes:
Jan.
196k
Feb. fferch April
-1U9
a/—
-115
+17
-U8
—•—
——
- ——
+ 33
^IB2
- 10
z-12
-195
—
-115
MM
—
+17
-H5
+3L
+53
n.a.
n.a.
n.a.
n.a.
- 2
n.a.
n.a.
n.a.
Outstanding
April 30,
1963
2,713
c/2,UU0
57 Covers $250 million assistance received in February and March"and repaid
in June.
b/ As published in the Federal Reserve Bulletin, September 1963, and March 196I4.
c/ As of March 31, 196U,
.
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- 10 -
Bullion market»
Large Russian gold sales in London were reported
early, in April but by contrast with earlier instances when Soviet marketings
have depressed the gold price in London, a strong demand for gold kept the fix
ing price around $35,080 per fine ounce. No additional major Russian gold
sales were reported for the rest of the month» Demand for gold varied from
light to moderate, and the fixing price fluctuated between $35*070 and $35,085
(See Table 10.)
Table 10. London Fixing Price for Gold
(in U.S. dollars per fine ounce)
February lU
20
March
28
6
35.076
35.079
March JL3
35.096
April
35.080
20
26
3
35*077
35.060
35.08-1
35.082
April 10
17
2h
May
1
35.071
35.081
35.085
35.071
Europe and British Commonwealth Section
lie Nine Charts on Financial 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 U - Interest Arbitrage for German Commercial Banks
Chart 5 - Short-term Interest Rates
Chart 6 - Long-term Bond Yields
Chart 7 - Industrial Stock Indices
Chart 8 - Spot Exchange Rates - Major Currencies Against
U.S. Dollar
Chart 9 - 3-month Forward Exchange Rates
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— 11 —
Table 11.- United Kingdom?
1
CTT
1963
High
. Low
196U
Jam
Feb,
.
31
7
lU
21
28
March 6
13
20
26
April 3
10
17
2k
May
1
y
iry bill
b:
arbitrage calculation
Treasur
U.S. DifferIn
- favor
- — W Jheo,
o T
pound
U X . bill
3.58
3.31
>32
>85
3.61
3.U8
3oU9
3.50
3.52
3,56
3.52
.53
.52
.52
=>50
,UU
«U5.
3.U3
3.U3
3.6U
3.6U
3.6U
U.16
Uel6
U.16
U.16
U0I6
U.16
Ud6
U.16
U»l6
U0I6
Treasury Bill Yields and Exchange Bates
.26
-0O3
•U6
-1.08
.13
-•31
-eUU
-«U5
-•37
-069
-,66
-.65
-.71
-.71
-,77
-.76
-.76
-.76
-.76
,12
.60
06U
.63
06U'
•6U
•66
o72
.71
.73
.73
+.23
—.62
280.59
279.59
U.62
3.56
U.88
U.06
—.18
279.77
279.78
279.7U
279.U3
279.77
279.78
279.78
279.82
279.81
279.88
279.85
279.87
279.97
280,00
Uol2
U.00
U.00
U.06
U.12
U.31
U.25
U.25U.25
U.25
U.25
U.25
U.19
U.19
U.38
U.38
U.38
U.38
5.19
5.12
5.00
5.12
5.12
5.06
U.9U_.
U.9U
U.9U
5.00
-.29
-.31
-.25
-.09
-.02
— .02
-.07
-.07
-oil
-»0U
-.OS
-.03
-.03
Certified N„I., noon buying rate.
Table 12* United Kingdom:
!
52
19<?7
11963
, High
Low
196U
JanFeb,.
30
6
13
20
27
March £
12
19
25
April 2
9
16
23
30
y
Spot
London deposit rates
pound
U.S.
Local
(U.S.
. dollar
authority
cents)-/ (3-mo.)
5=02
It.38
It , 7 0
U.75
U.75
U.88
5.15
5.08 .
5.08
5.00
U.97
U.95
u>95
5.00
u.97
u.95.
Selected Capital Market Yields
TJ.K. Government b m d yields
A-l/%
3-1/2f
5-1/2$
3S
1965-75
2 0 0 8 - 1 2 War Loan Consols
Share
yield
5.UU
U.76
6.00
5.U5
6.12
5.68
5.98
5.39
5.06
U.13
5,26
5.27
5.29
5,Ui
5.51
5,52
5-50
5.U7
5.U3
5.U3
5.U9
5-55
5.57
5.57
5.93
5.92
5.95
6,05
6.10
6.05
6.00
5*98
5.95
5.88
5.95
6,00
6,10
6,10
6.00
6.03
6,05
6*18
6.21
6.15
*6,10
60.06
6.05
5.95
6,02
6.12
6.19
6.17
5.86
5.88
5.91
6.02
6.08
5.97
5.95
5.92
5.90
5.83
5.89
6.00
6.0U
6.05
U.U3
U.U6
U.39
U.U5
U.U2
U.35
U.3U
U.37
u.38
u.29
U.Ul
u.29
u.31
u.31
Yield
gap
Share
prices
117.2
95.6
1.U3
1.U2
1*52
1.57
1.66
1,62
I061
1,55
1,52
1.5U
leU8
1.71
1.73
1.7U
110.3
109.2
111.0
110.U
111.U
113,2
113.8
113.7
113.3
. 113.6
113.U
11602
116.8
116,9
1
, Share prices are wkly,avgs»
Difference between yield on 2-1/2 per cent Consols and share yield.
.Chart 1
INTERNATIONAL
3-MONTH
Wednesday
MONEY
EURO-DOLLAR
MARKET
DEPOSIT
YIELDS
FOR
U.S.
VS. CERTIFICATE
DOLLAR
OF
INVESTORS
DEPOSIT
figures
Per
YIELDS
N E W YORK
friday figures
OFFER
.
RATES
ON
SELECTED
|
TREASURY
COMMERCIAL
3-MONTH
+™
BILLS - F u l l y
INVESTMENTS
H e d g e d
CANADA
PAPER-Fully
p .
H e d g e d
'CANADIAN FINANCE COMPANY
T- r" . ft
K/vl^—L
1964
cent
per
annum
INTEREST
ARBITRAGE,
3-MONTH
RATE
TREASURY
DIFFERENTIAL
UNITED
BILL
AND
STATES
/
CANADA
RATES
FORWARD
CANADIAN
DOLLAR
S P R E A D IN F A V O R O F C A N A D A +
r
RATE
r~
I
DIFFERENTIAL
I
WITH
r
I
1
FORWARD
71
n
EXCHANGE
N E T I N C E N T I V E IN F A V O R O F C A N A D A
I
1 I I I I I I I
1
COVER
PI-
+
i LlJ .1 I i 1 i 1 1 1 1 M I I I I I I I i I I
0
M
J
1963
S
D
M
J
$
1964
D
v\
INTEREST
Friday
ARBITHAOE.
NEW
Y O R K / L O N D O N
figures
3-MONTH
TREASURY
'
I
BILL
RATES
I
U.K. l O C i l AUTHORITY DEPOSITS
NEW V 0 8 *
RATE
Dl
n n n ^ ^ n ^ ^ r i ^ T F i n w ^ n r F H i i ^ R W A R D
s t e r l i n g
t r 8 | * D IN F A V O R OF L O N D O N
F O R W A R D RATE
Discount
RATI"
DIFFERENTIAL
WITH
FORWARD
EXCHANGE
IN f A V O R O F L O N D O N
I A V 0 R OF NEW Y O R K
COVER
INTEREST
ARBITRAGE
3-MONTH
FOR
TREASURY
GERMAN
BILLS,
" EUR O - D O LL A R D E P O S I T
COMMERCIAL
INTERBANK
LENDING
RATES
BANKS
RATE
I
AND
|
GERMAN INTERBANK
GERMAN TREASURY BILLS
f
RATE
j
r
DIFFERENTIAL
|
AND
|
r
i
FORWARD
DEUTSCHE
FORWARD
EXCHANGE
MARK
S P R E A D IN F A V O R OF F R A N K F U R T !
RATE
DIFFERENTIAL
NET I N C E N T I V E :
WITH
1
COVER
IN F A V O R OF F R A N K F U R T ( + )
TREASURY 8 I U S
M
J
S
1962
D
M
J
1963
S
D
M
i
'
S
0
19 64
n
i SHORT-TERM
INTEREST
RATES *
'EURO-DOLLAR • LONDON
JAPAN
r,3-month Ireotury bill roles for oil
except Japan.
(Average r
rt bank loans and discount*) I
LONG-TERM BOND
YIELDS
r
Vx--z
Y*
Ch
.^-'L7.
INDUSTRIAL
.~ .
STOCK
INDICES
,959=100
Hollo n o l > '
y.^v-Z jut
ISO !
450'
i 350
n«62
New lariat. Swiii Bank Corporation industrial Hock index.
hopan: index of 2 2 5 induilriol and olher Uocki traded on the Tokyo exchange.
f'
SPOT
EXCHANGE
RATES - M A J O R
CURRENCIES
AGAINST
U.S.
FRENCH FRANC
DOLLAR
Pe
, «.„»
A b o^ t poT
3-MONTH
FORWARD
.Fri<f °y <'9uras
AGAINST
U.S.
EXCHANGE
RATE
DOLLARS
DISCOUNT-
AGAINST
POUND
STERLING
- LONDON
P R E M I U M 4-
AGAINST
POUND
STERLING
- LONDON
PREMIUM +
rf]r\
FRENCH FRANC
L
/
W
1964
@FedFRASER