The Lebanese Eurobonds Market Observed a Drop during this Week

Because of lower demand for both 5 year and 10 year maturities, the Lebanese Eurobonds market, reflected by the BLOM Bond Index (BBI), witnessed a drop of 0.31% to reach 102.97 points during this week.

Yields on the Lebanese Eurobonds maturing in 5 years and 10 years increased from 6.19% and 6.86% to 6.24% and 6.89%, respectively.

Moreover, the JP Morgan Emerging Markets’ Bond Index, which registered a weekly gain of 0.99% to 764.83 points, outperformed the BBI.

Demand on US treasuries decreased further this week, as investors cut back on bond holding prior to the $15B sale of 30-year bonds held on Thursday. In addition to that, when compared to the previous period, US jobless claims fell by 1,000 to 266,000 during the week on ended Aug. 6. This decline in jobless claims supported expectations of an improving US economy.  As such, the yields on the US treasuries maturing in 5 years and 10 years rose from 1.03% and 1.51% last week to 1.16% and 1.57% this week, respectively.

Therefore, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable fell from 516 bps and 535 bps to 508 bps and 532 bps, respectively.  

5 Year Credit Default Swaps, Mid-Prices (in basis points)