Demand for the Lebanese Eurobonds slightly improved during the past 2 weeks, where the BLOM Bond Index (BBI) gained 0.17%, to stand at 107.53 points, with a 1.78% gain since year start. Accordingly, demand for medium and long term maturities inched up by year-end, with the 5Y and 10Y yields on the Lebanese Eurobonds dropping 1 basis point (bp) and 2 bps to 5.38% and 6.28%, respectively.
In the U.S, demand for treasuries rose triggered by an international slowdown in economic growth and low inflation, wherethe 5Y and 10Y yields lost 3 bps and 5 bps to 1.65% and 2.17%, respectively. Correspondingly, the 5Y and 10Y spreads between the Lebanese Eurobonds and their U.S benchmark narrowed by 2 bps and 3 bps to 373 bps and 411 bps, respectively.
Demand on emerging market bonds progressed amid a slowdown in global economic growth and amid speculations that the Chinese government will further ease monetary policy. This led the JP Morgan Emerging Countries’ bond index to increase by 1.24% to 662.57 points.
In Lebanon, the 5Y CDS went down from the past 2 weeks’ quote of 386-416 bps to 379-409 bps, this week. Likewise the 5Y CDS of Saudi Arabia decreased from 70-80 bps to 62-71 bps, whereas that of Dubai broadened from 210-230 bps to 217-237 bps. Internationally, the 5Y Brazil decreased from and 210-215 bps to 198-205 bps, during the same period, while that of Turkey broadened from 181-185 bps to 177-190 bps.