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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 G O V E R N O R * May 25, 1966 PITAL MARKET DEVELOPMENTS ABROAD 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 - New York, London, Montreal: Yields for U.S. Dollar Investors on 3-month Funds Chart 2 - London: Yields for U.S. Dollar Investors on 3-month Funds Chart 3 - Interest Arbitrage: Frankfurt/London, Zurich/London Chart Interest Arbitrage: New York/Canada Chart Interest Arbitrage: New York/London Chart Short-term Bond Yields Chart Long-term Bond Yields Chart 8 - Spot Exchange Rates--Major Currencies Against U.S. Dollar Chart 9 3-month Forward Exchange Rates Chart 10 Industrial Stock Indices Europe and British Commonwealth Section. OFFICIAL USE ONLY (Decontrolled after six months) NEW YORK, 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 | E U R O D O L L A R OVER U . S . C E R T I F I C A T E OF DEPOSIT F I N A N C E C O . PAPER RATES ( c o v e r e d ) : Q U O T E D I N N E W YORK CANADIAN FINANCE COMPANY U . K . H I R E PURCHASE U.S. FINANCE COMPANY Mar. Jun. 1964 Sept. Dec. Mar. Jun. 1965 Sept. Dec. Mar. Jun. 1966 Sept. Dec. L O N D O N : F I E L D S FOR U . S . DOLLAR I N V E S T O R S O N 3 - M O N t j f - F U N D S E U R O - D O L L A R D E P O S I T RATES 9 0 DAY 1 8 0 DAY -30 DAY- "cALL 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 ) EURO D O L L A R D E P O S I T HIRE P U R C H A S E r 1 DIFFERENTIAL VvOR HIRE PURCHASE FAVOR EURODOLLAR LOCAL AUTHORITY DEPOSIT EURO-DOLLAR DEPOSIT T r D IFFERENTIAL 1 FAVOR LOCAL AUTHORITY FAVOR EURO-DOLLAR 1964 1965 1966 I N T E R EST 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 , FRANKFURT INTERBANK LOAN RATE VS. LONDON EURO DOLLAR IN RATE ( C O V E R E D ) TERMS OF DM INTERBANK LOAN RATE EURO-DOLLAR I I DIFFERENTIAL FAVOR FRANKFURT FAVOR EURO-DOLLAR M ZURICH-DEPOSIT RATE VS. LONDON EURO DOLLAR i l l RATE ( C O V E R E D ) IN TERMS SWISS FRANCS I 6 SWISS DEPOSIT RATE 1 1 DIFFE R E N T I A L z ' \ V V] FAVOR ZURICH 1 . M 1 n 1 1 1 1 1 1 PRICE OF G O L D I N L O N D O N FAV OR EURO- DOLLAR v 1 1 1 l 1 O " a V 1 1 1 1 1 1 1 1 1 1 INTEREST ARBITRAGE, UNITED STATES/CANADA 3 - M O N T H TREASURY BILL RATES CAN. FIN. CO. (PAPER CANADA — UNITED STATES BILL RATE DIFFERENTIAL A N D F O R W A R ) C A N A D I A N D O L L A R SPREAD IN FAVOR OF CANADA PREMIUM DISCOUNT I FORWARD RATE 3 - M O N T H C O V E R E D RATE DIFFERENTIALS (NET INCENTIVES) PRIME FINANCE PAPER FAVOR CANADA ( V U \ l \ FAVOR U.S. FAVOR CANADA TREASURY BILLS FAVOR 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 3-MONTH TREASURY BILL RATES U.K. LOCAL AUTHORITY DEPOSITS NEW Y O R K ' RATE D I F F E R E N T I A L A N D FORWARD I J - J 3-MONTH STERLING S P R E A D IN F A V O R OF L O N D O N DISCOUNT yji FORWARD RATE 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 C O V E R (NET I N C E N T I V E ) IN F A V O R OF L O N D O N IN F A V O R OF N E W Y O R K I I I I I 1 1 1 1 I I 1 I I I I 1 S H O R T - T E R M INTEREST RATES * U.K. EURO-DOLLAR - LONDON U.S. SWITZERLAND JAPAN GERMANY CANADA U.S. 1962 1963 1964 1965 3 month Iftotufy bill ralet lor oil countries except Japan (Average rote on bonk loons and discounts) Switzerlond'(3-month deposit rotej and Germany (interbank Loan Role) ~j~~ 3-month rote lor US dollar deposits m 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 * Average ot yield: lor loui loreign government dollar bondi quoied in London 1965 1966 SPOT E X C H A N G E 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 1.2 GERMAN MARK f/V U.K. STERLING B E L G I A N FRANC FRENCH F R A N C - DUTCH GUILDER C A N A D I A N DOLLAR I T A L I A N LIRA JAPANESE YEN 1.2 M J 1964 S D M J 1965 S D M J 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 figures A G A I N S T U. S. D O L L A R S e. PREMIUM* GERMAN MARK S W I S S FRANC POUND S T E R L I N G ~ DISCOUNTA G A I N ST P O U N D STERLING - L O N D O N PREMIUM /|\\ S W I S S FRANC - G E R M A N MARK U. S. DOLLAR DISCQUNTA G A I N S T POUND STERLING - L O N D O N PREMIUM A DUTCH GUILDER BELGIANFRANC — FRENCH K v FRANC M J DISCOUNTS 1964 D M I 1965 S D M J 1966 S D INDUSTRIAL STOCK INDICES Ralio icalt 300 SWITZERLAND 250 GERMANY U.K. 200 U.S. 150 100 300 250 JAPAN 200 CANADA U.S. 150 100 1963 1964 Swm Bank Corporation industrial Hock index Japan; index of 225 industrial and other slocks traded on the Tokyo exchange 1965 1966 May 2 5 , 1 9 6 6 H. 13 N o . 249 IT. Latest Figures Plotted in H.13 Chart Series, 1966 (all figures per cent per annum) Upper Panel Chart 1 (Wednesday, May 18 5. 62 Euro-$ Deposit May 20 (Friday, Finance co. paper: U.S. Canada Hire-purchase paper, U.K. Chart 2 (Friday, May 20 ) 5.38 5. 76 5.31 5.50 5.81 90-day 180-day 5,<?5 (May 13) Chart 3 (Period: May 8-15 ) Interbank loan (mid-point) 6.12 Euro-$ deposit (average) 5,74 ( r ) (Date: March 15 > 6.on Zurich 3-mo. deposit Price of gold (Friday, Mav 13 +0.90 Forward pound -0.69 Net incentive (U.K. +) 40.21 5,75 6,03 (May 13) Lower Panel Spread favor U.K. Treasury bills: Local-authority deposit 5.52 4.62 U.K. U.S. Chart 6 (Friday, May 20 ) Hire-purchase paper Upper Panel Treasury bills: 6.10 Euro-$ deposits:. Call 7-day 30-day Chart 5 (Friday, May 20 5. 26 U.S. certif. of deposit Lower Panel ) is 191 ) U.S. U.K. Canada Interbank loan rate (German) (May 15) Euro-$ deposit (London) Zurich 3-mo. deposit March 15 ) (Date: Japan composit rate (Date: February 28) 4.62 5.52 4.96 6.12 5,75 4.00 7,570 Chart 7 U.S. Gov't. (Wed., May 18 ) 4nM U.K. War Loan (Thurs.,Mav 12) German Fed. (Fri., Swiss Confed. (Fri., May l3 ) 7 n 7f> May 13) 1 94 ) Canadian Gov't. Chart 4 (Friday, Mav 20 Treasury bills: Canada U.S. Spread favor Canada ) Netherlands Gov't perpetual 3% (Friday, May 13 ) u. Q6 —Li2. 40.34 Forward Canadian $ -0.17 Net incentive (Canada +) 40.17 Canadian finance paper (Wed..May 6.00 Euro-$; bonds (Fri., 5, 65 4 04 May ?n ) For descriptions and sources of data, see special supplement to H. 13, Number 239, March 16, 1966.
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