During the week ending 27th of October, Lebanese Eurobonds showed a slight improvement, as the BLOM Bond Index (BBI) added a marginal 0.20% over the week to 102.70 points. Hence, the BBI was able to outperform the JP Morgan Emerging Markets’ Bond Index which lost a weekly 0.74% to reach 762.32 points.
Higher demand on Lebanese Eurobonds was translated by a decrease in the yield on the Lebanese Eurobonds maturing in 5Y and 10Y from 6.38% and 6.97% last week, to 6.33% and 6.90%, respectively.
In contrast, demand for US treasuries waned as improved US data, including jobless claims, manufacturing activity, and pending home sales strengthened the probability that the Fed would raise interest rates by the end of the year. The yields on the US treasuries maturing in 5 and 10 years went up from 1.26% and 1.76% last week to 1.33% and 1.85% this week. Hence, the spread between the yields on the 5 Year and 10 Year Lebanese Eurobonds and their US comparable went from 512 bps and 521 bps last week to 500 bps and 505 bps this week, respectively.