US Yields Ascend as Fed Raises Interest Rates  

The BLOM Bond Index (BBI) registered a 1.58% weekly rise to reach 101.60 points. However, the JP Morgan Emerging Markets’ Bond Index dropped by a weekly 0.65% to reach 729.76 points.

As such, yields on the Lebanese Eurobonds maturing in 5Y and 10Y fell from 6.94% and 7.54%, to 6.75% and 7.20%, respectively.

In the US, demand for US treasuries maturing in 5 and 10 years plunged after the Federal Reserve decided to raise interest rates, by a quarter-percentage point, for the first time in a year and signalled to a faster pace of rate hikes in the upcoming year. As such, yields climbed from 1.83% and 2.40%, the past week to 2.10% and 2.60%, respectively.

As for the spreads between the yields on the 5 Year and 10 Year Lebanese Eurobonds and their US comparable, they shrank from 511 bps and 514 bps last week to 465 bps and 460 bps this week, respectively.

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

15/12/2016 08/12/2016
Lebanon 541 545
KSA 119 120
Dubai 143 145
Brazil 295 297
Turkey 287 287

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