Investors’ demand for Lebanese Eurobonds relaxed during the week as regional security concerns faded. Consequently, the BLOM Bond Index (BBI) edged down a weekly 0.14% to 106.88 points mainly on regressing demand for medium term and long term maturities. The 5Y and 10Y yields each augmented by 3 basis points (bps) to 5.27% and 6.21%, respectively.
In the U.S, positive reports on jobless claims resulted in U.S Treasuries posting weaker performances during the week. In details, the 5Y and 10Y yields incremented by weekly 20 bps and 16 bps to 1.50% and 1.99%, respectively. Correspondingly, the 5Y and 10Y spreads between the Lebanese Eurobonds and their U.S benchmark narrowed by 17 bps and 13 bps to respective levels of 377 bps and 422 bps.
Emerging markets suffered from intensified strains on the Russia-Ukraine conflict, increased speculation concerning deals between Greece and Eurozone authorities and the expectation of oil prices going through another downwards cycle after recent stability this past week. Accordingly, emerging bonds declined over the week, sending the JP Morgan Emerging Markets Index down by 0.44% to 666.62 points.
Lebanon’s credit default swaps for 5 years (CDS) steadied over the past week and slightly narrowed from last week’s quote of 371-393 bps to a current 370-392 bps. In regional economies, the 5Y insurance premiums on sovereign debt in Saudi Arabia went from 71-79 bps to a current quote of 75-80 bps, while that of Dubai narrowed from 210-230 bps to 208-226 bps. As for emerging economies, the 5Y CDS quote in Brazil broadened from 225-228 bps to 237-240 bps. Turkey’s 5Y CDS quote also widened from 186-189 bps to 188-191 bps.