Demand for Lebanese and US Treasuries Down over the Past Week

The BLOM Bond Index (BBI) registered a 0.24% weekly decline to 103.12 points and by that was outpaced by the JP Morgan Emerging Markets’ Bond Index which recorded a 1.02% weekly uptick to 774.55 points.

Demand for Eurobonds was down both in Lebanon and the United States. The Lebanese Eurobonds maturing in 5 and 10 years saw their yields increase from last week’s 6.17% and 6.80% to 6.25% and 6.83% this week, respectively.

In the US, the yields on the US treasuries maturing in 5 and 10 years also rose from last week’s 1.18% and 1.57% to 1.19% and 1.61% this week, respectively. Demand for the safe-haven notes rose earlier in the week after a series of lower-than-expected economic data was released. Investors are closely monitoring new economic releases in order to get a better understanding of the path the US economy is headed on.

The spread between the yields on the 5 Year Lebanese Eurobonds and their US comparable broadened over the past week from 499 bps to 506 bps while the 10 Year spread moved from 523 bps last week to 522 bps this week.

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

08/09/2016 01/09/2016
Lebanon 474 479
KSA 142 154
Dubai 148 158
Brazil 247 338
Turkey 243 309

Leave a Reply

Your email address will not be published. Required fields are marked *