The BLOM Bond Index (BBI) registered a 0.28% weekly drop to stand at 99.73 points, a 6-year low. Also, the JP Morgan Emerging Markets’ Bond Index fell by a weekly 0.50% to reach 724.52 points.
Hence, yields on the Lebanese Eurobonds maturing in 5Y and 10Y grew from 6.90% and 7.46% to 6.99% and 7.58%, respectively.
Demand for US treasuries maturing in 5 and 10 years dropped on expectations of interest rate hikes in the US, hence yields increased from 1.83% and 2.36%, the past week to 1.90% and 2.45%, respectively. This rise can also be attributed to the surging oil prices that are inciting expectations of a higher inflation, in addition to President Trump’s promises of fiscal stimulus.
As for the spreads between the yields on the 5 Year and 10 Year Lebanese Eurobonds and their US comparable, they broadened from 507 bps and 510 bps last week to 509 bps and 513 bps this week, respectively.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
01/12/2016 | 24/11/2016 | |
Lebanon | 562 | 555 |
KSA | 125 | 127 |
Dubai | 157 | 161 |
Brazil | 312 | 307 |
Turkey | 306 | 296 |