| 29/08/2024 | 22/08/2024 | Change | Year to Date | |
| BLOM Bond Index (BBI) | 5.45 | 5.41 | 0.77% | -9.61% |
| Weighted Yield | 215.12% | 212.10% | 1.42% | 144.95% |
| Weighted Spread | 21,000 | 20,689 | 1.50% | 139.29% |
| 29/08/2024 | 22/08/2024 | Change | |
| BBI | 5.45 | 5.41 | 0.77% |
| JP Morgan EMBI | 900.44 | 897.69 | 0.31% |
| 5Y LEB | 108.10% | 108.90% | -80 |
| 10Y LEB | 105.00% | 105.80% | -80 |
| 5Y US | 3.66% | 3.72% | -6 |
| 10Y US | 3.87% | 3.86% | 1 |
| 5Y SPREAD | 10,444 | 10,518 | -74 |
| 10Y SPREAD | 10,113 | 10,194 | -81 |
The BLOM Bond Index (BBI) which is BLOMInvest Bank’s market value-weighted index tracking the performance of the Lebanese government Eurobond’s market (excluding coupon payments), increased throughout the course of the week by 0.77%, to reach 5.45 points by August 29th, 2024. Similarly, JP Morgan EMBI rose by 0.31% to stand at 900.44 points on August 29th, 2024 compared to 897.69 points on August 22nd, 2024.
The yield on both the five-year (5Y) and ten year (10Y) Lebanese Eurobonds declined by 80 bps to stand at 108.1% and 105% respectively by the week ending August 29th, 2024 compared to the previous week.
US yield curve shifted lower over the course of the week as one and five years’ yields dropped by 5 and 6 bps to stand at 4.38% and 3.66% respectively on August 29th, 2024 compared to the previous week. However, the ten years’ yield increased slightly by 1 bps to stand at 3.87% over the same period.
The ten-year US Treasury yield increased on Friday after several decent economic data revealed by US Bureau of Economic Analysis. First, the recent Personal Consumption Expenditures (PCE) prices index estimate which is Fed’s favorite index inflation gauge increased by 2.5% which is better than the previous quarter’s 3% and the forecasts of 2.6%. In addition, the real GDP estimates of Q2 grew at 3% annually compared to previous quarter which recorded 1.4% annually and better than the initial estimate of 2.8% annually.
In addition, US Labor Department data revealed showed a slight improvement in the labor market. In details, US initial jobless claims, being the number of people claiming unemployment benefits fell by 2,000 from the prior week to reach 231,000 on the period ending August 24th and below market forecasts of 236k, as revealed by U.S. Department of Labor. Moreover, the four-week moving average for initial jobless claims that dismiss week-to-week volatility dropped to record 231.5K.
However, the latest labor market data revealed on Thursday will not prevent the Federal Reserve from starting rate cuts in September as expected by economists, 2 months before the US election, after July jobs report and the noteworthy downward revision to nonfarm payrolls for the year ending March 2024.
In turn, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparable recorded a decline from 10,518 and 10,194 bps to 10,444 and 10,113 bps respectively by the week ending August 29th, 2024 compared to prior week.
| 5Y Credit Default Swaps (CDS) | ||
| 29/08/2024 | 22/08/2024 | |
| KSA | 55 | 58 |
| Dubai | 61 | 61 |
| Brazil | 147 | 148 |
| Turkey | 272 | 270 |
| Source: Bloomberg | ||
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 29/08/2024 | 22/08/2024 | Change | 29/08/2024 | 22/08/2024 | Change bps |
| 12/06/2025 | 6.25 | 6.65 | 6.60 | 0.82% | 924.78% | 890.85% | 3,392.89 |
| 28/11/2026 | 6.60 | 6.54 | 6.50 | 0.62% | 212.74% | 211.66% | 108.15 |
| 23/03/2027 | 6.85 | 6.53 | 6.43 | 1.54% | 191.00% | 190.79% | 20.86 |
| 29/11/2027 | 6.75 | 6.54 | 6.50 | 0.55% | 153.24% | 153.07% | 17.54 |
| 03/11/2028 | 6.65 | 6.53 | 6.50 | 0.52% | 127.86% | 127.84% | 2.37 |
| 26/02/2030 | 6.65 | 6.53 | 6.50 | 0.45% | 113.42% | 113.58% | (15.04) |
| 22/04/2031 | 7.00 | 6.57 | 6.49 | 1.23% | 108.69% | 109.59% | (89.98) |
| 23/03/2032 | 7.00 | 6.56 | 6.54 | 0.44% | 107.43% | 107.52% | (8.77) |
| 02/11/2035 | 7.05 | 6.58 | 6.53 | 0.78% | 104.49% | 105.16% | (66.87) |
| 23/03/2037 | 7.25 | 6.58 | 6.52 | 1.06% | 108.57% | 109.33% | (76.21) |
Source: BLOMInvest Bank
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