Lebanese Eurobonds Market Followed the Trend of US Treasuries

The Lebanese Eurobonds regressed over the past week with the BLOM Bond Index (BBI) decreasing 0.13% to 103.48 points.

The Lebanese gauge was outpaced by the JP Morgan Emerging Markets’ Bond Index which increased by a weekly 0.52% to 692.62 points.

Demand for both medium and long-term Lebanese Eurobonds declined as shown by the 5Y and 10Y yields that added 2 basis points (bps) and 1 bp to 6.28% and 6.78%, respectively.

Similarly, demand for safe haven US treasuries fell over the past week as speculators expect the US Federal Reserve will increase interest rates this year. Moreover, gains in the stock markets witnessed after the European Central Bank expanded its monetary policy, curbed investors away from the safe haven assets. Hence, the 5 Year and 10 Year yields in the US increased from 1.33% and 1.83% to 1.45% and 1.93%, respectively.

Accordingly, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable narrowed from 493 bps and 494 bps to 483 bps and 485 bps, respectively.  

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

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