Demand for Safe-Haven Government Bonds Rose across the Board

The BLOM Bond Index (BBI) increased by 0.03% over the period ranging from 6 to 20 April 2017 and settled at 106.66 points. The Lebanese index was outpaced by the JP Morgan Emerging Markets’ Bond Index (EMBI) which rose by 0.74% to 776.79 points over the above mentioned period.

Demand for Lebanese Eurobonds maturing in 5 and 10 years was contrasted over the past two weeks. The yield on the Lebanese Eurobonds maturing in 5 years rose from 5.20% on 06/04/2017 to 5.49% on 20/04/2017 while that of the Lebanese Eurobonds maturing in 10 years fell from 6.51% to 6.48% over the same period.

In the U.S., demand for treasuries increased as shown by the decline in the yields on the 5 Year and 10 Year notes from 1.87% and 2.34% on 06/04/2017 to 1.78% and 2.24% on 20/04/2017, respectively.

Demand for safe-haven US treasuries was underpinned by geopolitical tensions, the uncertainty revolving around the French election but also by President Trump stating that he is in favour of a low-interest rates policy.

The 5 year and 10 year spread between the Lebanese Eurobonds’ yields and the US treasuries broadened by 38 basis points (bps) and 7 bps to stand at 371 bps and 424 bps, respectively.

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

20/04/2017 06/04/2017
Lebanon 380 376
KSA 91 93
Dubai 111 112
Brazil 227 225
Turkey 230 236

 

Prices Weekly Yields Weekly
Maturity Coupon in % 20/04/2017 06/04/2017 Change 20/04/2017 06/04/2017 Change bps
12/06/2018 5.15 101.25 101.38 -0.13% 4.02% 3.94% 8
12/11/2018 5.15 101.5 101.5 0.00% 4.15% 4.17% -2
23/04/2019 5.5 101.88 102 -0.12% 4.51% 4.47% 4
20/05/2019 6 102.88 103 -0.12% 4.53% 4.50% 3
28/11/2019 5.45 102.25 102.13 0.12% 4.52% 4.58% -6
09/03/2020 6.375 104.25 104.5 -0.24% 4.78% 4.71% 7
14/04/2020 5.8 102.5 102.38 0.12% 4.89% 4.94% -5
19/06/2020 6.15 103.25 103.13 0.12% 5.02% 5.08% -5
12/04/2021 8.25 110.63 110.88 -0.23% 5.25% 5.21% 4
04/10/2022 6.1 103 102.75 0.24% 5.46% 5.51% -6
27/01/2023 6 102.25 101.88 0.36% 5.54% 5.61% -8
22/04/2024 6.65 103.25 103 0.24% 6.07% 6.12% -5
04/11/2024 6.25 100.75 100.38 0.37% 6.12% 6.19% -6
03/12/2024 7.00 105.15 104.75 0.38% 6.14% 6.21% -7
26/02/2025 6.20 100.25 99.75 0.50% 6.16% 6.24% -8
12/06/2025 6.25 100.25 99.75 0.50% 6.21% 6.29% -8
28/11/2026 6.60 101.25 101.75 -0.49% 6.42% 6.35% 7
23/03/2027 6.85 102.25 102.63 -0.37% 6.54% 6.49% 5
29/11/2027 6.75 101.25 101.38 -0.13% 6.58% 6.57% 2
03/11/2028 6.65 100.13 99.75 0.38% 6.63% 6.68% -5
26/02/2030 6.65 99.88 99.5 0.38% 6.66% 6.71% -4
22/04/2031 7.00 101.5 101 0.50% 6.83% 6.89% -6
23/03/2032 7.00 101.38 101.25 0.13% 6.85% 6.86% -1
02/11/2035 7.05 100 100 0.00% 7.05% 7.05% 0
23/03/2037 7.25 101 101.25 -0.25% 7.15% 7.13% 2

 

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