Demand on US Treasuries Rose Post-Yellen Speech

The BLOM Bond Index (BBI) fell by a marginal 0.17% during the past week to settle at 103.85 points this week. Moreover, the index was outperformed the JP Morgan Emerging Markets’ Bond Index (EMBI), which registered a 0.74% uptick to 784.9 points in the past week.

The yields on the Lebanese Eurobonds maturing in 5 and 10 years rose to 6.30% and 6.88% from 6.25% and 6.79%, respectively, on July 13th.

In the US, yields on the 5 year and 10 year treasuries declined from 1.94% and 2.37% on July 6th, to 1.89% and 2.35%, this week.  The increased demand on US Treasuries followed the dovish comments from the Federal Reserve chair Janet Yellen this week. Despite sharing optimistic data on household spending and manufacturing, Yellen said that the US inflation rate is facing “uncertainty” as to when it will pick up. Hence, investors preferred safe haven assets as the Chair’s message shed doubt on the Fed’s future rate hikes and policy actions.  

The 5 year and 10 year spread broadened by 10 and 11 basis points (bps) to 441 bps and 453 bps, respectively, by July 13, 2017.

Weekly Change of Lebanese Eurobonds Prices

  Prices Weekly Yields Weekly
Maturity Coupon in % 13/07/2017 06/07/2017 Change 13/07/2017 06/07/2017 Change bps
12/06/2018 5.15 100.25 100.2 0.05% 4.86% 4.92% -6
12/11/2018 5.15 100.25 100.13 0.12% 4.95% 5.04% -10
23/04/2019 5.5 99.95 100.13 -0.18% 5.52% 5.42% 11
20/05/2019 6 100.75 101 -0.25% 5.56% 5.43% 14
28/11/2019 5.45 99.5 99.88 -0.38% 5.67% 5.50% 17
09/03/2020 6.375 101 101.25 -0.25% 5.96% 5.86% 10
14/04/2020 5.8 99.5 99.63 -0.13% 6.00% 5.94% 5
19/06/2020 6.15 100.25 100.38 -0.13% 6.05% 6.01% 5
12/04/2021 8.25 106.75 107 -0.23% 6.20% 6.14% 6
04/10/2022 6.1 99 99.25 -0.25% 6.33% 6.27% 6
27/01/2023 6 98.25 98.25 0.00% 6.38% 6.38% 0
22/04/2024 6.65 100.5 100.63 -0.13% 6.55% 6.53% 2
04/11/2024 6.25 98.13 98.25 -0.12% 6.57% 6.55% 2
03/12/2024 7.00 102.38 102.5 -0.12% 6.59% 6.57% 2
26/02/2025 6.20 97.63 97.75 -0.12% 6.60% 6.58% 2
12/06/2025 6.25 97.63 97.88 -0.26% 6.64% 6.60% 4
28/11/2026 6.60 98.75 99 -0.25% 6.78% 6.74% 4
23/03/2027 6.85 99.88 99.75 0.13% 6.87% 6.88% -2
29/11/2027 6.75 98.88 98.88 0.00% 6.90% 6.90% 0
03/11/2028 6.65 97.75 97.75 0.00% 6.94% 6.94% 0
26/02/2030 6.65 97.25 97.5 -0.26% 6.98% 6.95% 3
22/04/2031 7.00 99.63 99.75 -0.12% 7.04% 7.03% 1
23/03/2032 7.00 99.13 99.5 -0.37% 7.09% 7.05% 4
02/11/2035 7.05 98.25 99.63 -1.39% 7.22% 7.08% 14
23/03/2037 7.25 99.25 99 0.25% 7.32% 7.35% -2

 

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