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H. 13 No. 374 October 30, CAPITAL MARKET DEVELOPMENTS ABROAD Lisr \u\ zL oo' jl. Ijl. Ten C h a r t s on F i n a n c i a l Markets Abroad L a t e s t F i g u r e s P l o t t e d i n H. 13 Chart S e r i e s , 1968 dci^t'tcLl I. Ten C h a r t s on F i n a n c i a l Markets Abroad Chart Chart Chart Chart Chart Chart Chart Chart Chart Chart 1 - New York, London: Y i e l d s on U.S„ D o l l a r Funds 2 - London: Y i e l d s f o r U.S. D o l l a r I n v e s t o r s on 3-Month Funds 3 - I n t e r e s t Arbitrage: Frankfurt/London, Zurich/London 4 - I n t e r e s t A r b i t r a g e : New York/Canada 5 - I n t e r e s t A r b i t r a g e : New York/London 6 - Short-Term I n t e r e s t Rates 7 - Long-Term Bond Y i e l d s 8 - 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 9 - 3-Month Forward Exchange Rates 10 - I n d u s t r i a l Stock I n d i c e s Europe and B r i t i s h Commonwealth S e c t i o n . NOT FOR PUBLICATION DECONTROLLED AFTER SIX MONTHS 1968. iNEW YORK-LONDON: 3-MONTH DOLLAR YIELDS DEPOSIT ON U.S. DOLLAR FUNDS RATES Wednesdoy figures Per cent per onnum EURO-DOLLAR DEPOSIT 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 DOLLAR OVER U . S . C E R T I F I C A T E OF D E P O S I T CALL EURO DOLLAR DEPOSIT RATE VS. U.S. FEDERAL FUNDS RATE CALL EURO-DOLLAR D E P O S I T S FEDERAL FUNDS E U R O D O L L A R OVER F E D E R A L F U N D S Mar. Jun. Sept. Dec. 1965 Mar. Jun. 1966 Sept. Dec. Mar. Jun. 1967 Sept. Dec. Mar. Jun. 1968 Sept. Dec. 3 LONDON: YIELDS EURO-DOLLAR Friday figure! FOR DEPOSIT U.S. DOLLAR INVESTORS ON 3-MONTH FUNDS RATES Per cent per annum — M J S D M 1965 J 1966 S D M J 1967 S D M J S 1968 D 4 LONDON: YIELDS FOR HIRE PURCHASE A N D Friday figure* U.S. LOCAL DOLLAR INVESTORS O N AUTHORITY 3-MONTH D E P O S I T RATES FUNDS (covered) EURO-DOLLAR D E P O S I T HIRE P U R C H A S E FAVOR HIRE P U R C H A S E DIFFERENTIAL FAVOR EURO-DOLLAR EURODOLLAR DEPOSIT LOCAL A U T H O R I T Y D E P O S I T FAVOR LOCAL AUTHORITY DIFFERENTIAL OR E U R O D O L L A R I INTEREST ARBITRAGE: FRANKFURT FRANKFURT/LONDON, INTERBANK LOAN RATE VS. ZURICH/LONDON L O N D O N EURO DOLLAR RATE (COVERED) I IN I TERMS OF DM E U R O - D O L L A R _____ _i I N T E R B A N K LOAN RATE FAVOR DIFFERENTIAL FAVOR ZURICH DEPOSIT RATE VS. L O N D O N EURO-DOLLAR RATE FRANKFURT EURODOLLAR (COVERED) IN TERMS OF SWISS FRANCS S W I S S DEPOSIT RATE FAVOR DIFFERENTIAL H PRICE * OF GOLD IN LONDON Market closed March 15-April 1, 1968 ZURICH dollor equivalent per fine • INTERS? ARBITRAGE, 3-MONTH TREASURY UNITED BILL • y STATES / C A N A D A RATES C A N . F I N . CO P A P E R UNITED S T A T E S CANADA BILL , RATE , 1 1 DIFFERENTIAL 1 AND 1 FORWARD : 1 CANADIAN 1 1 DOLLAR PREMIUM S P R E A D IN FAVOR OF CANADA F O R W A R D RATE DISCOUNT r 3-MONTH COVERED RATE DIFFERENTIALS (NET INCENTIVES) FAVOR CANADA TREASURY BILLS PRIME FINANCE PAPER FAVOR U.S. FAVOR CANADA 1965 1966 1967 1968 1 2 n INTEREST ARBITRAGE, 3-MONTH TREASURY NEW BILL YORK/LONDON RATES U.K. LOCAL AUTHORITY D E P O S I T S LONDON NEW YORK 1965 1966 1967 1968 i INTEREST RATE ARBITRAGE, DIFFERENTIAL NEW AND YORK/LONDON 3-MONTH FORWARD 4 STERLING S P R E A D IN F A V O R OF L O N D O N 2 PREMIUM 0 DISCOUNT FORWARD RATE 2 4 6 8 10 T 2 IN F A V O R OF L O N D O N 0 IN F A V O R OF N E W Y O R K 2 4 6 RATE M I DIFFERENTIAL J i S i WITH D , I FORWARD M 1965 J EXCHANGE i . " 1966 - COVER (NET INCENTIVE) , I , , i , , I , ; I I I I ' " - 1967 8 - 1968 SHORT-TERM INTEREST RATES* 8 EURO-DOLLAR - L O N D O N t f~ ^ 7 Vx 6 U.K. 5 / u s - /ir~* SWITZERLAND 4 -J" 3 2 9 8 JAPAN 7 6 CANADA I 5 4 GERMANY I I I I I I I I I I i I I I I I I I :: i I 1964 1965 ; I 1966 3-month treasury bill rotes for oil countries except Japan Average rote on bonk I Switzerland 3 month deposit rote) and Germany Interbank loon Rote 3-month rote for U S dollar deposits in London j ; 3 ; I ! I I I 1 I ; ! 11 11 1 ! I 1 I I I 2 1967 1968 |0 LONG-TERM BOND YIELDS NETHERLANDS CANADA U.S. SWITZERLAND 9 GERMANY EURO-DOLLAR BONDS 8 U . S . EURO DOLLAR B O N D S U.S. CORP. Aaa BONDS 1964 * $* * ** **** Averoge of New ser es New series New series 1965 1966 yields for four foreign government dollar bonds quoted m London for Germany starts 7 9 65 for Switzerland starts 3 3 67 for Netherlands starts 1 7 66 1967 1968 C h a r t 8A SPOT EXCHANGE RATES - MAJOR CURRENCIES AGAINST U.S. DOLLAR Above par 1.6 SWISS FRANC Ll\ I GERMAN MARK U.S. U.K. STERLING Below par Above par ' DUTCH GUILDER U.S. FRENCH FRANC JAPANESE YEN Below par S M D M 1966 * Devaluation of the pound sterling from $2.8(Ho $2 40 S 1967 D M J 1968 S D M J 1969 S D VChart 8B SPOT EXCHANGE RATES - MAJOR CURRENCIES AGAINST U.S. DOLLAR Above par 1.2 BELGIAN FRANC ITALIAN LIRA U.S. CANADIAN DOLLAR Below par J S 1966 S 1967 D M S 1968 D S 1969 D o C h a r t 9A 3-MONTH FORWARD EXCHANGE RATES AGAINST U.S. DOLLARS-NEW YORK Friday figures Per cent per an PREMIUM + GERMAN MARK OA -ZYVA l\ SWISS zv^ FRANC \ 'vy • \ POUND STERLING 1 ^ f - 1 DISCOUNT- DUTCH GUILDER A / CANADIAN DOLLAR FRENCH FRANC DISCOUNT— M S D 1966 S M 1967 D J 1968 S D J 1969 S D 11 Chart 9B 3-MONTH FORWARD EXCHANGE RATE AGAINST POUND STERLING-LONDON Friday f i g u r e s Per cent per a n n u m PREMIUM* GERMAN MARK U.S. DOLLAR W V SWISS FRANC FRENCH FRANC S M D 1966 S M 1967 D M J 1968 S D M J 1969 S D INDUSTRIAL STOCK INDICES , 958= IOO Rotto teole 360 320 280 /I 240 SWITZERLAND U.S. 200 GERMANY 160 U.K. 120 360 320 280 JAPAN 240 CANADA 200 U.S. 160 120 1965 * * * 1966 Swiss Bonk Corporation industrial stock index Japan index of 225 industrial and other stocks traded on the Tokyo exchange 1967 1968 \b H. 13 No. 374 II. Chart 1 Chart 4 Upper P a n e l s (Wednesday, Oct. 23 Euro-$ deposit U.S. c e r t i f . ) of d e p o s i t Oct. 23 Oct. 5.50 5.37 +0. 13 Spread ( f a v o r Canada +) ) Forward Canadian d o l l a r -0.63 -0.50 C a l l Euro-$ deposit 6.20 N e t i n c e n t i v e (Canada + ) F e d e r a l Funds 5. 84 Canadian Finance paper 6.25 C h a r t 5A (Friday, Oct. C h a r t 2A Oct. Euro-$ deposits (Friday, 25 Call 6.12 30-day 6.44 90-day Lower Panel 25 U.S. 5.98 Lower P a n e l s (Wednesday, (Friday, T r e a s u r y b i l l s : Canada 6. 38 Upper Panel October 30, a . L a t e s t F i g u r e s P l o t t e d i n H. 13 S e r i e s ( a l l f i g u r e s i n p e r c e n t p e r annum) 6. 56 ) 25 ) U.K. L o c a l A u t h o r i t y d e p o s i t 7. 19 Treasury b i l l s : 6.38 U.K. U.S. 5.37 C h a r t 5B S p r e a d ( f a v o r U.K. + ) + 1.01 Forward r a t e - 1. 12 Net i n c e n t i v e (U.K. + ) Chart 2B Oct. 18 ) 6. 02 Local Authority ( Oct. 18 ) 5. 83 Oct. 18 ) 6. 59 Hire-Purchase ( Euro-$ deposit ( Chart 3 I. Upper Panel (Period: - 0 . 11 Chart 6 Upper P a n e l (Friday, Treasury B i l l s Euro-$ deposit Oct. 16 - 2 3 : Oct. Euro-$ d e p o s i t s 4. 11 Z u r i c h 3-month d e p o s i t Z u r i c h 3-mo. d e p o s i t Euro-$ r a t e II. (covered) 4 . 00 (Oct. P r i c e of Gold (London) 23) 5 . 9 9 39. 14 ( a v e r a g e - w e e k e n d e d O c t . 25) 5.50 Lower P a n e l German I n t e r b a n k l o a n r a t e ( O c t . 16-23 ) 16-23 ) 5.37 6.38 6. 56 4. 75 Lower P a n e l ( d a t e : O c t . ) (London) I n t e r b a n k Loan ( m i d - p o i n t ) (average) 25 U.S. U.K. Canada 4 . 75 (Oct. 23) 4 . 0 0 J a p a n Composite R a t e (Aug. 30 ) 7.49 U.S. Treasury b i l l s 25 ) 5.37 (Oct. 1968. II H. 13 No. 374 October 30, 1968. C h a r t 9A Chart 7 Upper P a n e l U.S. G o v ' t . Oct. 25 (Friday, (Wed. , Oct. 23 ) 5.28 ) Against U.S. dollars Upper P a n e l N e t h e r l a n d s Govt. Canadian G o v ' t . ( F r i . , Oct. ID 6 . 4 8 Swiss f r a n c s +0.47 (Wed., O c t . 23 ) 7 . 0 4 German marks +2. 25 £ sterling -1.12 Swiss Gov't. Composite ( F r i . , O c t . 25) 4. 37 Lower P a n e l Middle Panel German Fed., (Fri., Oct. 25 ) 6.21 U.K. War Loan ( T h u s . , Oct. 24) 7.51 Euro-$ bonds (Fri., Oct. 2 5 7.56 ) Lower Panel -0.47 Dutch g u i l d e r 4-1 m Canadian d o l l a r -0.63 Chart 9B (Friday, Oct. 2 5 7 . 14 U.S. C o r p o r a t e Aaa ( S e p t . 30 ) 5.97 Sept. 3 0 C h a r t 8A (Friday, O c t . 25 ) Upper panel +3.42 German mark +0.98 U.S. dollar Lower panel Upper P a n e l + 1.39 Swiss franc Swiss f r a n c s 78 German marks U.K. £ s t e r l i n g 4-P. 60 -0.38 Lower P a n e l French f r a n c s "0-7ft Dutch g u i l d e r s -0.46 J a p a n e s e yens +0-45 Chart 10 (Index; 1 9 5 8 = 100) Upper Panel U.K. ( 0ct ) 267.1 Germany ( O c t . 23 ) 268.2 Switzerland ( Oct. 2 5 ) 344.2 Oct. 2 5 ) Belgian f r a n c s Canadian d o l l a r s " Q * 73 +0.78 Italian lira +0.33 - 25 Lower Panel ) 231.7 Canada ( Oct. 10 ) 219.0 Oct. 25 ) 305.5 U.S. (Friday, ( Japan ( Oct. 25 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 , s e e S p e c i a l Supplement No. 343-S d a t e d March 27, 1968. ) Against pound sterling ) U.S. Euro-bonds ( French f r a n c
@FedFRASER