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Ec4024 2009 Lecture12

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A lecture on bond markets and the international money markets.

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Ec4024 2009 Lecture12

  1. 1. Lecture 12 Domestic & International Money Markets
  2. 2. What I want you to learn Domestic & International Money Markets Matter, especially in illiquid times.
  3. 3. Domestic
  4. 4. Public Issue Tender Issue T-Bills Auction Issue Direct Placement + Tranches
  5. 5. Commercial Paper Interbanks Also: Acceptances, Repurchases CDs
  6. 6. International
  7. 7. Eurodollars/Euromarket
  8. 8. Bonds
  9. 9. What is a bond?
  10. 10. !quot;#$%$&' ()*+',#*-$.'#&/'&0*1$&2*34#',23* Eurozone Bond Spreads over Germany (bps) $.'#*-'#/,&+*56&*1437 :)) 98) 9)) (8) ()) 8) ) -'#/,&+ ;#,&<' ='>?6quot;/ @0,>+ A4,6& D$#0quot;?,> Equot;30#6, @#'>,&2 -#''<' BC*
  11. 11. Exchange Rates Real Effective Exchange Rate
  12. 12. 01quot;$#.2%345678994 36:99 A)quot;1$*./%B*.C &DG%Equot;1*F2 &DA%Equot;1*F2 <$F#)*./%Equot;1*F2 39:99 96:99 99:99 46:99 49:99 ;6:99 ;9:99 56:99 6 > 5 4 8 ; 9 3 ? 6 > 4 8 ? @ 5 ; 9 3 @ > 4 8 ? > 6 5 ; 9 3 @ 6 5 75 = 75 = 75 = 75 = 75 = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 79 = 79 = 79 = 79 = 79 = 79 = 79 = 79 = < quot; < quot; < quot; < quot; < quot; <quot; < quot; < quot; < quot; < quot; < quot; < quot; <quot; < quot; < quot; <quot; < quot; < quot; < quot; < quot; < quot; < quot; <quot; < quot; < quot; < quot; < quot; < quot; < quot; < quot; < quot; < quot; < quot;
  13. 13. A$ 9:; 9:6 5:5 5:8 5:< 5:= 5:> 5:? 5:@ 5 -7 66 1 $2 76 B( 6 5:5>6 C7 66 A$ -7 9 9:;>8 19 $2 79 B( 9 C7 99 A$ -7 9 15 $2 79 B( 5 C7 95 A$ -7 9 18 $2 79 B( 8 C7 98 A$ -7 9 1< $2 79 B( < C7 9< A$ -7 9 1= $2 79 B( = C7 9= A$ -7 9 1> !quot;##$%&'()%quot;'(*+,$-.('%$/( $2 79 01quot;-/,#2'$3(%$.(4'566678996 B( > C7 (monthly) 9> A$ -7 9 1? $2 79 B( ? C7 9? A$ -7 9 1@ $2 79 Dollar/Euro Ex. Rate B( @ C7 9@ A$ -7 9 1; $2 79 B( ; C7 5:>@>> 9; A$ -7 96
  14. 14. >1 8:;< 8:=7 8:=< 8:<7 8:<< 8:97 '6 ?@ 55 $ 65 >+ 5 %65 A/ 5 quot;6 5 >1 5 '6 ?@ 88 $ 68 >+ 8 %68 A/ 8 quot;6 8 >1 8 '6 ?@ 84 $ 68 >+ 4 %68 A/ 4 quot;6 8 >1 4 '6 ?@ 87 $ 68 >+ 7 %68 A/ 7 quot;6 8 >1 7 '6 ?@ 8B $ 68 >+ B %6 8 A/ B quot;6 8 >1 B '6 ?@ 8C 4555-6-7889 $ 68 >+ C %6 8 A/ C quot;6 8 >1 C !quot;#$%&'()*+$,-*./01'(#-21quot;#3- '6 ?@ 8; $ 68 >+ ; %6 8 A/ ; quot;6 8 >1 ; '6 ?@ 8= $ 68 >+ = %68 A/ = quot;6 8 >1 = '6 ?@ 8< $ 68 >+ < %68 Sterling/Euro Ex. Rate A/ < quot;6 8 >1 < '6 ?@ 89 $ 68 >+ 9 %68 A/ 9 quot;6 8 9
  15. 15. Next Time: Stablisation & Growth Pact: Handcuffs for Ireland’s economic policy makers

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