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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 S F E D E R A L RESERVE SYSTEM H. 13 No. 266 September 21, 1966 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 Chart Chart Chart Chart Chart Chart Chart Chart Chart 1 - New York, London, Montreal: Yields for U,S. Dollar Investors on 3-month Funds 2 - London: Yields for U,S, Dollar Investors on 3-month Funds 3 - Interest Arbitrage: Frankfurt/London, Zurich/London 4 - Interest Arbitrage: New York/Canada 5 - Interest Arbitrage: New York/London 6 - Short-term Bond Yields 7 - Long-term Bond Yields 8 - Spot Exchange Rates--Major Currencies Against U.S. Dollar 9 - 3-month Forward Exchange Rates 10 - Industrial Stock Indices Europe and British Commonwealth Section. OFFICIAL USE ONLY (Decontrolled after six months) 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 I N V E S T O R S O N 3 - M O N T H F U N D S D O L L A R DEPOSIT RATES: NEW Y O . R K - L O N D O N EURO-DOLLAR 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 ; F I N A N C E C O . PAPER RATES ( c o v e r e d ) : Q U O T E D IN N E W YORK CANADIAN FINANCE COMPANY HIRE PURCHASE j \ U.S. Mar. Jun. 1964 Sept. Dec. Mar Jun. 1965 Sept. Dec. FINANCE COMPANY Mar. Jun. 1966 Sept. Dec. L O N D O N : YIELDS EUR'O-DOLLAR FOR DEPOSIT U.S. DOLLAR INVESTORS 180 90 O N 3 - M O N T H FUNDS RATES DAY DAY CALL 30 HIRE PURCHASE AND LOCAL EURO-DOLLAR DAY AUTHORITY DEPOSIT RATES (covered) DEPOSIT HIRE PURCHASE 7 DIFFERENTIAL FAVOR EURO-DOLLAR^ T LOpAL AUTHORITY EURO-DOLLAR DEPOSIT DEPOSIT r FAVOR LOCAL AUTHORITY DIFFERENTIAL FAVOR EURO DOLLAR ; V > 1964 1965 1966 INTEREST 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 L O A N RATE VS. L O N D O N EURO D O L L A R RATE ( C O V E R E D ) I N TERMS OF D M INTERBANK LOAN RATE EURODOLLAR 1 1 DIFFERENTIAL - h k .V / . z\. u 1 1 l 1 1 / 1 1 i i 1 1 0R\P'AHKFURT J FAVOR EURO-DOLLAR i i i i i i i i 1 ii 1 i i 1 i i Z U R I C H D E P O S I T RATE V S . L O N D O N EURO D O L L A R RATE (COVERED) ' IN T E ^ M s T o V W K S F R A N C S I SWISS DEPOSIT RATE H PRICE OF GOLD I N L O N D O N 1964 us d<.u,„ 1965 1966 P ., i„ GE, UNITED S T A / E S / C A N A D A INTEREST i n i I I 3 - M O N T H TREASURY BILL RAT IPAPER UNITED STATES BILL RATE DIFFERENTIAL A N D F O R W A R D C A N A D I A N D O L L A R SPREAD L I Vy FORWARDJATE 3 - M O N T H C O V E R E D RATE DIFFERENTIALS (NET INCENTIVES) DISQOUNT FAVOR CAiAOA P R I M E F I N A N C E PAPER FAVOR U.S. FAVOR CANADA TREASURY BILLS FAVOR U.S. I IIIIIII INTEREST A R B I T R A G E , N E W Y O R K / L O N D O N 3 - M O N T H TREASURY BILL RATES 6 LONDON U.K. LOCAL AUTHORITY DEPOSITS NEW YORK 4 2 RATE D I F F E R E N T I A L A N D 3 - M O N T H FORWARD STERLING I I I S P R E A D I N F A V O R OF L O N D O N PREMIUM 0 DISCOUNT 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 ) I N F A V O R OF L O N D O N 1963 1964 1965 1966 S H O R T - T E R M INTEREST RATES U.K. I EURO-DOLLAR - LONDON SWITZERLAND JAPAN GERMANY CANADA 1962 1963 1964 1965 1966 L O N G - T E R M B O N D YIELDS GERMANY EURO-DOLLAR BONDS U.S. NETHERLANDS CANADA U.S. SWITZERLAND 1962 1963 1964 *'Xveroge of yields for four foreign government dollor bonds quoted «n London 1965 1966 SPOT EXCHANGE RATES - MAJOR CURRENCIES A G A I N S T U.S. DOLLAR S W I S S FRANC 1.2 G E R M A N MARK U.K. STERLING BELGIAN FRANC FRENCH FRANC D U T C H GUILDER C A N A D I A N DOLLAR I T A L I A N LIRA JAPANESE YEN 1.2 S M 1964 o M j 1965 s D M 1 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 AGAINST Friday ligurei U.S. D O L L A R S — N E W YORK GERMAN MARK v —''/ — ^ SWISS FRANC i | v /-v— V 4 POUND STERLING DISCOUNT PREMIUM DUTCH GUILDER FRENCH FRANC CANADIAN DOLLAR DISCOUNTA G A l NST P O U N D S T E R L I N G — L O N D O N PREMIUM SWISS FRANC A I GERMAN MARK U.S. DOLLAR DISCOUNT M I S 1964 D M J 1965 S S 1966 D I N D U S T R I A L STOCK INDICES „ Ratio icole 300 SWITZERLAND - 250 GERMANY U.K. 200 US 150 100 300 250 JAPAN 200 CANADA Zx' 150, 100 ...1 L i L I i J.-! 1965 1963 * 1966 . H. 13 Latest Figures Plotted in H.13 Chart Series, 196 , (all figures per cent per annum) " Upper Panel Chart 1 (Wednesday, J- ) Euro-$ Deposit Chart 5 (Friday, Sept Treasury bills: U.S. certif. of deposit It ) 60 U.K. U.S. 6 Spread favor U.K. Lower Panel 6 (Friday, Sept, 16 ) 5 U.S. 5 Canada Hire-purchase paper, U.K. Finance co. paper: For^a^d pound 63 6 84 6 96 Chart 2 (Friday, Sept, 16 ) Chart 6 (Friday, Sept 16 Euro-$ deposits: . Call 7-day 30-day^ 6.23 6. 30 6 62 Treasury bills: 90-day 180-day Hire-purchase paper (Sept 9) Local-authority deposit (Sep: 9) Chart 3 , Upper Panel ( P e r i ^ T Sep: 6, 69 7 25 6. 93 6 . 37 1- Interbank loan (mid^point) (Date: ) U.S. U.K. Canad, Interbank loan rate (German) Sep: 1-7 Euro-$ deposit (London) Zurich 3-mo. deposit ^agus: 13 ) (Date: Japan composit rate (Date: -n.- 30 _) 6. 69 4,25 7 49 Chart 7 deposit (average) Lower Panel +0,33 Net incentive (U.K. + ) U.S. Gov't. (Wed., Sep: August !;• U ) 4 82 : 7 19 U.K. War Loan (Thurs. ,Sep% L ' Zurich 3-mo. deposit i Price of gold (Friday ASept 9 German Fed. (Fri. , Sept 2 ) Swiss Confed. (Fri.,Sept 9 ) Canadian Gov't. Chart 4 (Friday, Sept It Canada U.S. Spread favor Canada 3 .42 -0 50 Forward Canadian $ 40 41 Net incentive (Canada +) -0 09 (Wed.,Sept 1-" 4, 07 3 83 Netherlands Gov't perpetual 3% (Friday, %=p: - ) 6 , Ot Euro-$ bonds (Fri., Sep' 6 S3 Treasury bills: Canadian finance paper b 23 -9 ) For descriptions and sources of data, see special supplement to H.13, Number 239, March 16, 1966.
@FedFRASER