Upbeat Earnings & Economic Data Drive Down the Demand on US Treasuries

The BLOM Bond Index (BBI) closed at 92.72 points by April 17th 2019, registering an incremental uptick of 0.32% over the week. The BBI surpassed the JP Morgan Emerging Markets’ Bond Index (EMBI), which closed at 821.26 points, recording a weekly down tick of  0.87%. Demand on the 5 year (5Y) and 10Y Lebanese Euro bonds increased over the week, as their respective yields slipped from 9.91% and 9.89% to 9.88% and 9.82%, respectively.

In the US, the demand for 5Y and 10Y treasuries fell over the week ending April 17th, owing it to the release of strong financial results and market expectations of upbeat economic data to be released end of day today. In fact, the Chinese economy grew by 6.4% in Q1 2019 topping the market estimate of 6.3%, as released this Wednesday. Moreover, US retail sales data and jobless figures will be released by end of day April 17th. Both indicators are expected to ease investor concerns, signaling a more stable US economy. Against this backdrop, the yields on 5Y and 10Y US treasuries climbed from 2.31% and 2.51% to 2.41% and 2.60%, respectively.

Accordingly, the 5Y and 10Y spread between the yield on the Lebanese Euro bonds and its US comparable narrowed from 760 and 738 basis points (bps) last week to 747 and 722 bps this week.

 

Weekly Change of Lebanese Eurobonds Prices

  Prices Weekly Yields   Weekly
Maturity Coupon in % 17/04/2019 11/04/2019 Change 17/04/2019 11/04/2019 Change bps
09/03/2020 6.375 97.75 97.38 0.38% 9.04% 9.44% -40
14/04/2020 5.8 96.82 96.56 0.27% 9.25% 9.47% -22
19/06/2020 6.15 96.51 96.27 0.25% 9.36% 9.54% -18
12/04/2021 8.25 96.59 96.29 0.31% 10.19% 10.35% -16
04/10/2022 6.1 89.10 89.23 -0.15% 9.90% 9.84% 6
27/01/2023 6 87.66 87.79 -0.15% 10.01% 9.94% 6
22/04/2024 6.65 86.52 86.45 0.08% 10.16% 10.17% -1
04/11/2024 6.25 84.48 84.48 0.00% 9.98% 9.97% 1
03/12/2024 7.00 86.35 86.45 -0.11% 10.29% 10.26% 3
26/02/2025 6.20 84.49 84.41 0.10% 9.74% 9.76% -1
12/06/2025 6.25 85.04 84.86 0.21% 9.53% 9.56% -4
28/11/2026 6.60 83.33 83.16 0.21% 9.76% 9.79% -3
23/03/2027 6.85 83.51 83.30 0.26% 9.90% 9.94% -4
29/11/2027 6.75 82.47 82.18 0.35% 9.82% 9.87% -5
03/11/2028 6.65 81.91 81.42 0.60% 9.60% 9.69% -9
26/02/2030 6.65 80.36 79.66 0.87% 9.61% 9.73% -12
22/04/2031 7.00 79.74 79.17 0.72% 9.96% 10.05% -9
23/03/2032 7.00 81.64 80.64 1.24% 9.50% 9.66% -16
02/11/2035 7.05 80.25 79.50 0.95% 9.45% 9.55% -11
23/03/2037 7.25 80.66 80.12 0.67% 9.53% 9.61% -7

 

 

 

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