Yields Rise on Both Lebanese Eurobonds and US Treasuries

Fading demand was depicted over the past week as Adha Holiday occurred on Monday.

The BLOM Bond Index (BBI) recorded a 0.83% weekly decline to 102.27 points; however, it outpaced the JP Morgan Emerging Markets’ Bond Index which slid by 1.84% weekly to 760.30 points.

Demand for Eurobonds dropped in both Lebanon and the United States. The Lebanese Eurobonds maturing in 5 years and 10 years saw their yields rise from last week’s 6.25% and 6.83% to 6.42% and 7.06% this week, respectively.

In the US, as data revealed falling retail sales in August, investors predict that it is unlikely for the Federal Reserve to raise interest rates when it meets next week. As such, the yields on the US treasuries maturing in 5 and 10 years also rose from last week’s 1.19% and 1.61% to 1.20% and 1.71% this week, respectively.

The spread between the yields on the 5Y and 10Y Lebanese Eurobonds witnessed a rise over the past week from 506 bps and 522 bps last week to 522 bps and 535 bps, respectively.

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