US treasury yields down after Government shutdown in the last week of 2018

Lebanon’s BLOM Bond Index (BBI) slightly rose over the last week by 0.24% to close at 88.72 points. The yields on (5Y) and (10Y) Lebanese Eurobonds both declined, from 11.73 % last week to 10.70 % by the week ending Dec 27 and from 11.68% to 10.66% respectively.

As for the JP Morgan Emerging Markets’ Bond Index (EMBI), it recorded a weekly Decline by 0.18% and reached 770.15 points.

U.S. Treasury yields on the 5-Year and 10-year treasury dropped by 5 and 2 basis points (bps), ending this week at 2.60 % and 2.77% respectively. This drop is mostly driven by the US government shutdown that occurred last Saturday. Yields went lower on the 26th of December after President Trump appeared on a video conference with US troops, serving aboard, affirming that the shutdown will not end unless Congress funds the US-Mexico border wall. Hence, investors resorted to safe-haven assets, pushing their prices higher and Their yields lower.

The 5Y spread between the yield on the Lebanese Eurobonds and its US comparable widened by 2 basis points (bps) to stand at 810 bps this week ending Dec 27, as for and the  10Y spread, it remains constant at 789 basis points (bps).

Weekly Change of Lebanese Eurobonds Prices

  Prices Weekly Yields   Weekly
Maturity Coupon in % 12/27/2018 12/20/2018 Change 12/27/2018 12/20/2018 Change bps
3/9/2020 6.375 96.38 96.38 0.00% 9.62% 9.57% 5
4/14/2020 5.8 95.13 95 0.14% 9.88% 9.93% -5
6/19/2020 6.15 94.63 94.63 0.00% 10.15% 10.10% 5
4/12/2021 8.25 94.88 95 -0.13% 10.82% 10.74% 8
10/4/2022 6.1 86.25 86.13 0.14% 10.61% 10.64% -2
1/27/2023 6 84.38 84.25 0.15% 10.83% 10.85% -2
4/22/2024 6.65 83.5 83.13 0.45% 10.80% 10.90% -9
11/4/2024 6.25 80.38 80.13 0.31% 10.86% 10.92% -6
12/3/2024 7.00 83.38 83.13 0.30% 10.87% 10.93% -6
2/26/2025 6.20 79.75 79.75 0.00% 10.78% 10.76% 1
6/12/2025 6.25 79.75 79.38 0.47% 10.67% 10.75% -8
11/28/2026 6.60 78.5 78.13 0.47% 10.69% 10.77% -8
3/23/2027 6.85 79.13 78.88 0.32% 10.72% 10.77% -5
11/29/2027 6.75 77.88 77.75 0.17% 10.65% 10.67% -2
11/3/2028 6.65 76.88 76.25 0.83% 10.46% 10.58% -12
2/26/2030 6.65 75.88 75.25 0.84% 10.34% 10.45% -11
4/22/2031 7.00 75.88 75 1.17% 10.54% 10.69% -15
3/23/2032 7.00 75.75 75.5 0.33% 10.41% 10.45% -4
11/2/2035 7.05 75.5 75.38 0.16% 10.10% 10.12% -2
3/23/2037 7.25 75.75 75.75 0.00% 10.20% 10.20% 0

 

 

 

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