Demand for Lebanese Eurobonds and US Treasuries Moved in Opposite Directions this Past Week

Demand for the Lebanese Eurobonds fell over the past week, as reflected by the BLOM Bond Index (BBI) which lost 0.17% to reach 104.06 points.

The BBI was outperformed by the JP Morgan Emerging Markets’ Bond Index which gained a weekly 0.39% to 717.09 points.

Demand for Lebanese medium and long term maturities declined over the past week with the 5 year and 10 year yields respectively rising from last week’s 5.97% and 6.66% to 6.00% and 6.71%.

Demand for US treasuries fluctuated throughout the week. Early in the week, higher oil prices due to lower US crude stockpiles pulled demand down. However, demand was on the rise again on Thursday after Wall Street closed flat after two days of gains and after the US Treasury department held a successful auction for seven-year notes.

The 5Y and 10Y yields for US treasuries respectively ended the week at 1.35% and 1.83% compared to 1.38% and 1.85% previously.

Therefore, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable widened from 459 bps and 481 bps to 465 bps and 488 bps, respectively.

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




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