Lebanon’s Eurobonds showed improvement during the week, with the BLOM Bond Index (BBI) increasing 0.04%, to settle at 108.26 points. The gauge posted a 2.48% year-to-date (y-t-d) increase. The bouncing back of the Eurobonds market can be attributed to a weekly downtick in the 5Y and 10Y yields of 2 basis points (bps) and 1 bp to reach a yield of 5.15% and 6.20%, respectively.
A weekly rise in the U.S dollarand the continuing decrease in oil prices, in addition to the breakdown in relations between Ukraine and Russia as the latter faced more sanctions led to emerging markets witnessing a declining bond market, with the JP Morgan emerging countries’ bond index weekly performance demonstrating a weekly decline of 0.37% to 675.99 bps.
In the U.S, anticipation of Alibabaselling bonds for $8B, in addition to the doubling of military presence in the Iraq, strengthened U.S treasuries. This sent the 5Y and 10Y U.S yields down by 3 bps and 4 bps to 1.64% and 2.35%, respectively. Correspondingly, the 5Y and 10Y spreads between the Lebanese Eurobonds and their U.S benchmark respectively widened by 1 bps and 2 bps to 351 bps and 384 bps.
In Lebanon, the 5Y CDS broadened to 350-380 bps from 347-377 bps. In the region, the 5Y CDS of Dubai also broadened, from 167-177 bps to 169-179 bps, while that of Saudi Arabia narrowed from 60-66 bps to 60-65 bps. Internationally, the 5Y CDS of Turkey narrowed from 178-180 bps to 171-174 bps. Contrastingly, that of Brazil broadened from 168-170 bps to 176-178 bps.