Demand on US Treasuries Market Up : Investors Await China Trade Deal

Lebanon’s BLOM Bond Index (BBI) dropped by a weekly 1.80% to reach 90.16 points. As for the JP Morgan Emerging Markets’ Bond Index (EMBI), it also recorded a weekly decline of 0.15% and reached 821.19 points by May 9,2019.

Demand on the 5 year (5Y) and 10Y Lebanese Eurobonds decreased over the week, as their respective yields rose from 10.38% and 10.11% to 10.91% and 10.50%, respectively.

In the US, the demand for 5Y and 10Y treasuries grew over the week ending May 9th. In details, the yields on 5Y and 10Y US treasuries dropped from 2.34% and 2.55% to 2.25% and 2.45%, respectively. In fact, traders are closely following trade relations between the U.S. and China, after the US president Donald Trump threatened to raise tariffs from 10% to 25% on $200 billion worth of Chinese imports. Global Markets are now waiting to see if the two sides reach a compromise as the negotiations are due to resume on Friday.

Accordingly, the 5Y and 10Y spread between the yield on the Lebanese Eurobonds and their US comparables winded from 804 and 756 basis points (bps) last week to 866 and 805 bps this week.

5 Year Credit Default Swaps, Mid-Prices (in basis points)

09/05/2019 02/05/2019
Lebanon 843 797
KSA 85 78
Dubai 137 139
Brazil 174 174
Turkey 494 447

 Weekly Change of Lebanese Eurobonds Prices

  Prices Weekly Yields   Weekly
Maturity Coupon in % 09/05/2019 02/05/2019 Change 09/05/2019 02/05/2019 Change bps
09/03/2020 6.375 97.44 97.98 -0.55% 9.63% 8.88% 75
14/04/2020 5.8 96.45 96.88 -0.44% 9.89% 9.31% 58
19/06/2020 6.15 96.01 96.51 -0.52% 10.04% 9.48% 56
12/04/2021 8.25 95.83 96.94 -1.14% 10.70% 10.02% 68
04/10/2022 6.1 86.77 88.11 -1.51% 10.85% 10.32% 54
27/01/2023 6 84.98 86.42 -1.67% 11.04% 10.49% 55
22/04/2024 6.65 83.64 85.46 -2.13% 11.04% 10.49% 55
04/11/2024 6.25 81.70 83.40 -2.03% 10.77% 10.29% 48
03/12/2024 7.00 84.14 85.64 -1.75% 10.91% 10.50% 42
26/02/2025 6.20 81.29 83.22 -2.32% 10.61% 10.09% 52
12/06/2025 6.25 81.99 83.91 -2.29% 10.31% 9.82% 49
28/11/2026 6.60 80.22 82.22 -2.42% 10.46% 10.01% 45
23/03/2027 6.85 80.20 82.10 -2.32% 10.63% 10.21% 42
29/11/2027 6.75 79.25 81.11 -2.29% 10.49% 10.10% 39
03/11/2028 6.65 78.37 80.49 -2.63% 10.29% 9.88% 41
26/02/2030 6.65 76.93 79.09 -2.72% 10.23% 9.84% 39
22/04/2031 7.00 77.09 78.57 -1.88% 10.42% 10.16% 26
23/03/2032 7.00 79.17 80.64 -1.83% 9.90% 9.66% 24
02/11/2035 7.05 76.74 78.71 -2.50% 9.97% 9.67% 29
23/03/2037 7.25 77.22 79.41 -2.76% 10.02% 9.71% 32

 

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