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DIVISION OF INTERNATIONAL FINANCE N o ' 3 300 »OA*D OF OOVEHNOHS Ma j >' 24 > CAPITAL MARKET DEVELOPMENTS ABROAD I. II. T e n C h a r t s on F i n a n c i a l M a r k e t s Abroad L a t e s t F i g u r e s Plotted in H . 1 3 Chart Series, 1967 Ten Charts on F i n a n c i a l M a r k e t s Abroad Chart 1 Chart 2 Chart 3 Chart Chart Chart Chart Chart 4 5 6 7 8 Chart Chart 9 10 New Y o r k , L o n d o n , M o n t r e a l : Y i e l d s for U.S. D o l l a r Investors on 3 - m o n t h F u n d s L o n d o n : Y i e l d s for U.S. D o l l a r Investors on 3 - m o n t h F u n d s Interest A r b i t r a g e : Frankfurt/London, Zurich/London Interest A r b i t r a g e : New Y o r k / C a n a d a Interest A r b i t r a g e : New Y o r k / L o n d o n S h o r t - t e r m Interest Rates L o n g - t e r m Bond Y i e l d s Spot Exchange R a t e s - - M a j o r C u r r e n c i e s Against U.S. D o l l a r 3-month Forward Exchange Rates Industrial Stock Indices E u r o p e and British C o m m o n w e a l t h Section. O F F I C I A L USE ONLY (Decontrolled after six months) 1967 ' NEW YORK, LONDON, MONTREAL: YIELDS FOR U . S . DOLLAR I N V E S T O R S O N 3 - M O N T H F U N D S DOLLAR DEPOSIT RATES: N E W Y O R K - I O N D O N EURO DOLLAR D E P O S I T — U . S . CERTIFICATE OF D E P O S I T EURO DOLLAR OVER U . S . CERTIFICATE OF D E P O S I T FINANCE CO. PAPER RATES ( c o v e r e d ) : QUOTED IN NEW YORK U.K. HIRE P U R C H A S E CANADIAN F I N A N C E COMPANY U.S. FINANCE COMPANY Mar. Jun. Sept. 1965 Dec. Mir. .un. 1966 Sept. Dec. Mar. 1967 Jun. LONDON: YIELDS FOR U.S. DOLL** INVESTORS ON 3-MONTH FUNDS E U R O - D O L L A R D E P O S I T RATES 7 HIRE PURCHASE AND LOCAL ^ CALL AUTHORITY DEPOSIT RATES (covered) HIRE PURCHASE EURO-DOLLAR D E P O S I T FAVOR HIRE P U R C H A S E DIFFERENTIAL FAVOR E U R O - D O L L A R EURO-DOLLAR DEPOSIT ' LOCAL AUTHORITY DEPOSIT FAVOR LOCAL AUTHORITY DIFFERENTIAL FAVOR EURODOLLAR 1965 1966 1967 * I u \ INTEREST ARBITRAGE: 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 FRANKFURT INTERBANK LOAN RATE VS. LONDON EURO DOLLAR RATE ( C O V E R E D ) I N T E R B A N K LOAN R A T E EURODOLLAR DIFFERENTIAL FAVOR FRANKFURT FAVOR EURO-DOLLAR ZURICH DEPOSIT RATE VS. LONDON EURO DOLLAR RATE ( C O V E R E D ) j EURO-DOLLAR | S W I S S DEPOSIT RATE T DIFFERENTIAL T FAVOR ZURICH FAVOR r i i R O - D O L L A * I I F 1 I C 1 OF G O L D IN L O N D O N 35.1 35# 1965 1966 1967 INTEREST ARBITRAGE, 3-MONTH UNITED TREASURY STATES/CANADA BILL RATES CAN. FIN. CO. PAPER CANADA | UNITED S T A T E S I BILL RATE D I F F E R E N T I A L AND FORWARD CANADIAN DOLLAR S P R E A D IN FAVOR OF CANADA F O R W A R D RATE 3-MONTH COVERED RATE D I F F E R E N T I A L S (NET DISCOUNT INCENTIVES) FAVOR CANADA P R I M E FINANCE P A P E R FAVOR U . S . FAVOR CANADA TREASURY B I L L S FAVOR U . S . S M D 1964 M J 1965 S D M J 1966 s D M J 1967 S B . INTEREST 3-MONTH ARBITRAGE, TREASURY NEW BILL YORK/LONDON RATES I U.K. LOCAL AUTHORITY D E P O S I T S LONDON NEW YORK RATE D I F F E R E N T I A L AND 3-MONTH FORWARD STERLING S P R E A D IN F A V O R OF L O N D O N PREMIUM y/-\ FORWARD RATE RATE D I F F E R E N T I A L WITH I i ; ! i ^ FORWARD EXCHANGE y ; (NET IN F A V O R OF L O N D O N 1 A i COVER ^ \ y \ / | W DISCOUNT ' INCENTIVE) A v V V v f V ! ! ! 1 I 1964 1965 1966 I I 1967 I SHORT-TcRM INTEREST RATES * EURO-DOLLAR - LONDON t U.S. SWITZERLAND JAPAN GERMANY CANADA U.S. 1963 1964 1965 * 3-month treosvry bill rates for oil countries except Jopon (Average rate on bank loam and discounts) Switzerland (3-month deposit rate' and Germany (interbank Loan Rote ~j~ 3 month rote for U 5 dollar deposits m London 1966 1967 LONG-TERM B O N D YIELDS NETHERLANDS CANADA SWITZERLAND 9 GERMANY 8 7 6 EURO DOLLAR B O N D S 5 US 4 1963 1964 1965 Average of yield* for four foreign government dollar bonds quoted m London New series for Germany starts 7 9 65 1966 1967 SPOT EXCHANGE RATES - M A J O R CURRENCIES A G A I N S T U.S. DOLLAR SWISS FRANC 1.2 G E R M A N MARK U.K. STERLING FRENCH F R A N C B E L G I A N FRANC, DUTCH GUILDER C A N A D I A N DOLLAR ITALIAN LIRA J A P A N E S E YEN M J 1965 S J S 0 1966 1967 \° 3-MONTH AGAINST FORWARD U.S. EXCHANGE DOLLARS —NEW RATES YORK ; G E R M A N MARK SWISS FRANC V POUND STERLING DISCOUNT- PREMIUM DUTCH GUILDER F R E N C H FRANC C A N A D I A N DOLLAR AGAINST POUND STERLING — L O N D O N S W I S S FRANC * G E R M A N MARK U . S . DOLLAR DISCOUNT- , M J S 1964 0 M J 1965 s 0 M J 1966 S D w INDUSTRIAL STOCK INDICES 1#58:1#Q Ratio scale 360 320 280 SWITZERLAND 240 200 GERMANY 5 160 120 360 320 280 JAPAN 240 200 CANADA 160 120 1964 1965 1966 1967 \%> H. 13 II. L a t e s t F i g u r e a P l o t t e d In H.13 C h a r t S e r i e s , 1967 ( a l l f i g u r e s p e r c e n t p e r annum) No. 300 Upper P a n e l Chart 1 (Wednesday, May 17 Chart 5 ( F r i d a y , May 19 ) Euro-$ d e p o s i t 4.£ U.S. c e r t i f . of d e p o s i t 4.48 Lower Panel (Friday, Treasury b i l l s : U.K. U.S. 5.09 3.52 Spread f a v o r U.K. +US7 Forward pound -0.70 Net i n c e n t i v e (U.K. +) +0.87 May 19 Finance co. paper: U.S. Canada H i r e - p u r c h a s e p a p e r , U.K. Chart 2 ( F r i d a y , May 19 4,18 4.72 4.99 ) 90-day 180-day 4.75 5.00 Chart 6 (Friday, May 19) Treasury b i l l s : Euro-$ d e p o s i t s : Call 30-day May 24, 1967 5.00 H i r e - p u r c h a s e paper U.S. U.K. Canada _2J2_ 5.09 4.06 5,18 I n t e r b a n k loan r a t e (German) 4.94 Euro-$ d e p o s i t (London) 3.80 (May 8-15) 5.00 (May 5) Local-authority deposit (May 5) Upper Panel 4. 94 Chart 3 (Period: May 8 - 1 5 ) Interbank loan (mid-point) 3. 80 Euro-$ deposit (average) 4.42 Lower Panel (Date: April 15 35.179 Price of gold (Friday, May 5 Chart 4 ( F r i d a y , May 19 Treasury b i l l s : Canada U.S. Spread f a v o r Canada Forward Canadian $ Net i n c e n t i v e (Canada +) Canadian f i n a n c e paper ) 4. 25 Zurich 3-month deposit ) Z u r i c h 3-month d e p o s i t (Date: April 15 *Japaii composite r a t e (Date: March 31 4.25 ) J 7. 32 Chart 7 U.S. G o v ' t . (Wed., May 17 J 4.87 U.K. War Loan ( T h u r s . , May 18 ) 6.60 German Fed. ( F r i . , 6.76 May 12 ) Swiss Confed. ( F r i . , A p r i l 21 ) 4. 29 Canadian G o v ' t . (Wed., May 17 ) 5.84 N e t h e r l a n d s G o v ' t , p e r p e t u a l 3X (Friday, May 12 ) 5.50 Euro-$ bonds ( F r i . , May 19 6.29 4.06 -0.09 .+0.45 4. 88 ) For d e s c r i p t i o n s and s o u r c e s of d a t a , see s p e c i a l supplement t o H.13, Number 239, March 16, 1966. * Japan Composite Rate Jan. 31 Feb. 28 Mar. 31 7.35 7.34 7.32
@FedFRASER