A lecture on bond markets and the international money markets.

1. Lecture 12
Domestic &
International Money
Markets

2. What I want you to learn
Domestic & International Money Markets
Matter, especially in illiquid times.

3. Domestic

5. Public Issue
Tender Issue
T-Bills Auction Issue
Direct Placement
+ Tranches

6. Commercial Paper
Interbanks
Also: Acceptances, Repurchases
CDs

7. International

11. Eurodollars/Euromarket

13. Bonds

14. What is a bond?

15. !quot;#$%$&' ()*+',#*-$.'#&/'&0*1$&2*34#',23*
Eurozone Bond Spreads over Germany (bps)
$.'#*-'#/,&+*56&*1437
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-'#/,&+ ;#,&<' ='>?6quot;/ @0,>+ A4,6& D$#0quot;?,> Equot;30#6, @#'>,&2 -#''<'
BC*

16. Exchange Rates
Real Effective Exchange
Rate

17. 01quot;$#.2%345678994
36:99
A)quot;1$*./%B*.C &DG%Equot;1*F2
&DA%Equot;1*F2 <$F#)*./%Equot;1*F2
39:99
96:99
99:99
46:99
49:99
;6:99
;9:99
56:99
6 > 5 4 8
; 9 3 ? 6 > 4 8 ?
@ 5 ; 9 3 @ > 4 8 ? >
6 5 ; 9 3 @ 6 5
75 = 75 = 75 = 75 = 75 = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 79 = 79 = 79 = 79 = 79 = 79 = 79 = 79
=
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18. A$
9:;
9:6
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Dollar/Euro Ex. Rate
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A$
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$2
79
B( ;
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19. >1
8:;<
8:=7
8:=<
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8:97
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$ 65
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A/ 5
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$ 68
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$ 68
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4555-6-7889
$ 68
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A/ C
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Sterling/Euro Ex. Rate
A/ <
quot;6 8
>1 <
'6
?@ 89
$ 68
>+ 9
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A/ 9
quot;6 8
9

20. Next Time:
Stablisation & Growth
Pact: Handcuffs for
Ireland’s economic
policy makers