US Treasury Yields Down Amid concerns about US-China Trade War

Lebanon’s BLOM Bond Index (BBI) dropped by a weekly 1.63% to reach 88.69points. As for the JP Morgan Emerging Markets’ Bond Index (EMBI), it recorded a weekly uptick of 0.29% and reached 823.58 points by May 15,2019.

Demand on the 5 year (5Y) and 10Y Lebanese Eurobonds decreased over the week, as their respective yields rose from 10.91% and 10.50% to 11.52% and 10.90%, respectively.

In the US, the demand for 5Y and 10Y treasuries grew over the week ending May 15th. In details, the yields on 5Y and 10Y US treasuries dropped from 2.25% and 2.45% to 2.18% and 2.40%, respectively.  In fact, the trade tensions between the U.S. and China are leading the  treasury market. In details, earlier this week, China hiked tariffs on $60 billion worth of U.S. goods. The move came after the U.S. raised levies on $200 billion worth of Chinese imports. The intensifying tensions, amplified investors’ fears of an international economic slowdown.

Accordingly, the 5Y and 10Y spread between the yield on the Lebanese Eurobonds and their US comparables winded from 866 and 805 basis points (bps) last week to 934 and 850 bps this week.

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

 

16/05/2019 09/05/2019
Lebanon 896 843
KSA 90 85
Dubai 138 137
Brazil 181 174
Turkey 489 494

 Weekly Change of Lebanese Eurobonds Prices

  Prices Weekly Yields   Weekly
Maturity Coupon in % 15/05/2019 02/05/2019 Change 15/05/2019 02/05/2019 Change bps
09/03/2020 6.375 97.38 97.44 -0.07% 9.78% 9.63% 15
14/04/2020 5.8 96.33 96.45 -0.13% 10.11% 9.89% 22
19/06/2020 6.15 95.72 96.01 -0.30% 10.39% 10.04% 35
12/04/2021 8.25 94.78 95.83 -1.10% 11.37% 10.70% 67
04/10/2022 6.1 85.37 86.77 -1.62% 11.43% 10.85% 58
27/01/2023 6 83.74 84.98 -1.46% 11.53% 11.04% 49
22/04/2024 6.65 81.91 83.64 -2.08% 11.58% 11.04% 54
04/11/2024 6.25 79.96 81.70 -2.13% 11.28% 10.77% 50
03/12/2024 7.00 82.26 84.14 -2.23% 11.44% 10.91% 53
26/02/2025 6.20 79.61 81.29 -2.06% 11.08% 10.61% 47
12/06/2025 6.25 80.36 81.99 -1.98% 10.74% 10.31% 43
28/11/2026 6.60 78.54 80.22 -2.10% 10.85% 10.46% 39
23/03/2027 6.85 78.52 80.20 -2.09% 11.01% 10.63% 38
29/11/2027 6.75 77.45 79.25 -2.27% 10.88% 10.49% 39
03/11/2028 6.65 76.78 78.37 -2.04% 10.62% 10.29% 32
26/02/2030 6.65 74.96 76.93 -2.56% 10.61% 10.23% 37
22/04/2031 7.00 75.23 77.09 -2.42% 10.76% 10.42% 34
23/03/2032 7.00 77.52 79.17 -2.09% 10.18% 9.90% 28
02/11/2035 7.05 75.05 76.74 -2.21% 10.23% 9.97% 26
23/03/2037 7.25 75.47 77.22 -2.26% 10.29% 10.02% 26

 

 

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