As Reflected by the BLOM Bond Index (BBI), the Lebanese Eurobonds market observed a a fall in the past week, where the index dropped by 0.14% to 103.35 points, mainly due to the lower demand for long term Lebanese Eurobonds.
However, the BBI outperformed the JP Morgan Emerging Markets’ Bond Index which lost a weekly 1.83% to 756.5 points.
Yields on the Lebanese Eurobonds maturing in 5 years barely slid from 6.18% to 6.17% while the yield on the Lebanese Eurobonds maturing in 10 years increased from 6.81% to 6.85%.
Demand for safe-haven assets in the US was more pronounced this week after the Federal Reserve kept rates unchanged on account of the uncertainty revolving around the unraveling of the Brexit process. Accordingly, the yields on the US treasuries maturing in 5 years and 10 years decreased from 1.11% and 1.57% last week to 1.09% and 1.52% this week, respectively.
Therefore, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable widened from 507 bps and 524 bps to 508 bps and 533 bps, respectively.
5 Year Credit Default Swaps, Mid-Prices (in basis points)