Lebanese Eurobonds Up While in the US, Markets Await Janet Yellen’s Statement

The BLOM Bond Index (BBI) grew by 0.20% to end the week at 103.66 points and with that it outperformed the JP Morgan Emerging Markets’ Bond Index which lost a weekly 0.31% to reach 768.28 points.

The Lebanese Eurobonds maturing in 5 and 10 years saw their yields fall from last week’s 6.21% and 6.76% to 6.14% and 6.70% this week, respectively.

On the contrary, demand for US treasuries fell over the past week with the yields on the 5 Year and 10 Year notes rising from 1.12% and 1.53% to 1.16% and 1.58%, respectively. The demand for US treasuries is highly sensitive to the statements made by the Federal Reserve and investors are currently eagerly waiting for Janet Yellen’s views on the US economy expected on Friday.

The spread between the yields on the 5 Year and 10 Year Lebanese Eurobonds and their US comparable respectively narrowed from 509 bps and 523 bps last week to 498 bps and 512 bps this week.

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

0 25/08/2016 18/08/2016
Lebanon 473 472
KSA 150 158
Dubai 158 161
Brazil 261 252
Turkey 245

245

 

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