Mixed Demand on T-Bills this Week as US Data Improved but Weak Inflation Concerns Rose

Over the past week, the BLOM Bond Index (BBI) lost an incremental 0.31% to settle at 103.80 points. It was surpassed by the JP Morgan Emerging Markets’ Bond Index (EMBI) which rose by 0.40%, to end the week at 794.99 points.

The yields on the Lebanese Eurobonds maturing in 5 and 10 years recorded upticks from last week’s 6.28% and 6.81% to 6.31% and 6.90% this week, respectively.

In the US, demand for treasuries was mixed throughout the week, which sent the yields on the 5Y and 10Y T-bills marginally down, from 1.78% and 2.20% on Aug.10th to 1.76% and 2.19%, respectively, on Aug.17th. In details, US retail sales released on Tuesday reflected a 0.6% improvement in July, the biggest rise in seven months, which jolted yields up as tensions with North Korea eased as well. Nonetheless, the FED’s minutes of meeting on Thursday revealed heightened concerns of policymakers about low inflation, confirming a dovish stance on hiking interest rates before the end of the year.  

The 5 Year and 10 Year spreads between the Lebanese Eurobonds and their US comparable rose from 450 basis points (bps) and 461 bps last week, to 455 bps and 471 bps, respectively, this week.

Weekly Change of Lebanese Eurobonds Prices

  Prices Weekly Yields Weekly
Maturity Coupon in % 17/08/2017 10/08/2017 Change 17/08/2017 10/08/2017 Change bps
12/11/2018 5.15 100.5 100.5 0.00% 4.72% 4.73% -1
23/04/2019 5.5 99.9 100.05 -0.15% 5.56% 5.46% 9
20/05/2019 6 100.75 100.88 -0.13% 5.54% 5.47% 7
28/11/2019 5.45 99.5 99.75 -0.25% 5.68% 5.56% 12
09/03/2020 6.375 101.5 101.75 -0.25% 5.73% 5.63% 10
14/04/2020 5.8 99.75 99.75 0.00% 5.90% 5.90% 0
19/06/2020 6.15 100.5 100.5 0.00% 5.95% 5.95% 0
12/04/2021 8.25 106.75 107 -0.23% 6.15% 6.09% 6
04/10/2022 6.1 99 99.13 -0.13% 6.33% 6.30% 3
27/01/2023 6 98 98.25 -0.25% 6.44% 6.38% 6
22/04/2024 6.65 100.25 100.5 -0.25% 6.60% 6.55% 5
04/11/2024 6.25 98 98.25 -0.25% 6.60% 6.56% 5
03/12/2024 7.00 102.25 102.5 -0.24% 6.60% 6.56% 4
26/02/2025 6.20 97.63 97.88 -0.26% 6.60% 6.56% 4
12/06/2025 6.25 97.63 98 -0.38% 6.64% 6.58% 6
28/11/2026 6.60 99.13 99.25 -0.12% 6.73% 6.71% 2
23/03/2027 6.85 99.88 100.5 -0.62% 6.87% 6.78% 9
29/11/2027 6.75 98.75 99.38 -0.63% 6.92% 6.83% 9
03/11/2028 6.65 97.25 98 -0.77% 7.01% 6.91% 10
26/02/2030 6.65 97 97.75 -0.77% 7.01% 6.92% 9
22/04/2031 7.00 99.5 99.75 -0.25% 7.06% 7.03% 3
23/03/2032 7.00 99 99.25 -0.25% 7.11% 7.08% 3
02/11/2035 7.05 98 98.38 -0.39% 7.25% 7.21% 4
23/03/2037 7.25 99 99.63 -0.63% 7.35% 7.28% 6

 

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