Flattening US Yield Curve amid Worries of Slowing U.S. Growth

Lebanon’s BLOM Bond Index (BBI) declined over the last week by 0.12% to close at 85.85 points.  The yields on (5Y) and (10Y) Lebanese Eurobonds witnessed variations in opposite sense. In fact the (5Y) Lebanese Eurobonds decreased by 6 basis points (bps) to reach 11.24% while the (10Y) Lebanese Eurobonds increased by 7 basis points (bps) to reach 11.22%.

As for the JP Morgan Emerging Markets’ Bond Index (EMBI), it recorded a weekly increase by 0.62% and reached 763.69 points.

In the US, the yields on the (5Y) and (10Y) treasuries witnessed a contraction of 10 and 16 basis points (bps) ending this week at 2.75% and 2.87% (with the latter standing at its lowest since Aug. 31) respectively. Global equity market had registered negative performance over the week due to growing doubts that Washington and Beijing will not be able to reach a substantive trade deal during a temporary “cease-fire” agreed at the G20 summit. Moreover, the spread between the (2Y) and (10Y) treasuries yields was at its flattest level in more than a decade among concerns about slowing U.S. growth and global investors’ worries over rising U.S. interest rates  next year.

The 5Y and 10Y spreads between the yield on the Lebanese Eurobonds and its US comparable winded from 845 basis points (bps) and 812 bps last week to 849 bps and 835 bps this week.

Weekly Change of Lebanese Eurobonds Prices

 

  Prices Weekly Yields   Weekly
Maturity Coupon in % 07/12/2018 29/11/2018 Change 07/12/2018 29/11/2018 Change bps
09/03/2020 6.375 94.63 94.63 0.00% 11.04% 10.98% 7
14/04/2020 5.8 93.38 93.38 0.00% 11.19% 11.11% 7
19/06/2020 6.15 93 93 0.00% 11.23% 11.17% 6
12/04/2021 8.25 92.63 93.5 -0.93% 11.93% 11.45% 48
04/10/2022 6.1 84.38 84 0.45% 11.23% 11.34% -12
27/01/2023 6 82.5 82.75 -0.30% 11.41% 11.31% 11
22/04/2024 6.65 80.75 81.13 -0.47% 11.55% 11.43% 12
04/11/2024 6.25 78 78.5 -0.64% 11.47% 11.32% 15
03/12/2024 7.00 81 81.38 -0.47% 11.47% 11.36% 11
26/02/2025 6.20 77 77.75 -0.96% 11.47% 11.25% 21
12/06/2025 6.25 76.88 77.5 -0.80% 11.37% 11.19% 17
28/11/2026 6.60 75.5 76.25 -0.98% 11.35% 11.17% 18
23/03/2027 6.85 76.13 76.75 -0.81% 11.36% 11.22% 15
29/11/2027 6.75 75 75.5 -0.66% 11.24% 11.13% 11
03/11/2028 6.65 73.5 74 -0.68% 11.13% 11.02% 11
26/02/2030 6.65 72 73 -1.37% 11.06% 10.86% 20
22/04/2031 7.00 72.5 73 -0.68% 11.15% 11.05% 10
23/03/2032 7.00 72.38 72.75 -0.51% 11.00% 10.93% 7
02/11/2035 7.05 71.75 72.25 -0.69% 10.70% 10.61% 8
23/03/2037 7.25 71.88 72.5 -0.86% 10.80% 10.70% 10

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