Eurobonds Market Globally Posted a Weekly Improvement

Lebanon’s Eurobonds showed a minor progress during the week, where the BLOM Bond Index (BBI) increased 0.09%, to settle at 108.47 points, with a 2.68% gain since year start. The 5Y yield on the Lebanese Eurobonds lost 1 basis point (bp) to 5.11%, while that of 10Y steadied at 6.12%.

As the OPEC meeting, held on November 27th, refrained from reducing output, in addition to speculations that the Chinese central banks will increase stimulus, investors were inclined toward safe assets. This triggered the JP Morgan Emerging Countries’ bond index to rise by 0.76% to 682.12 bps.

In the U.S, treasuries rallied as outlook for global inflation was pushed down by oil collapsing prices. Hence, 5Y and 10Y yields lost 8 bps and 10 bps to 1.56% and 2.24%, respectively. Correspondingly, the 5Y and 10Y spreads between the Lebanese Eurobonds and their U.S benchmark broadened by 7 bps each to 355 bps and 388 bps, respectively.

In Lebanon, the 5Y CDS broadened by 1 bp to 351-381 bps. Meanwhile the 5Y CDS of Dubai and Saudi Arabia narrowed from 179-180 bps and 65-70 bps to 171-178 bps and 56-66 bps, respectively. Internationally, the 5Y CDS of Turkey and Brazil also contracted from 167-170 bps to 165-169 bps and from 172-175 bps to 153-155 bps, respectively.

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