| 03/10/2024 | 26/09/2024 | Change | Year to Date | |
| BLOM Bond Index (BBI) | 6.58 | 5.33 | 23.37% | 9.05% |
| Weighted Yield | 211.21% | 239.13% | -11.68% | 140.50% |
| Weighted Spread | 20,669.00 | 23,456.41 | -11.88% | 135.52% |
| 03/10/2024 | 26/09/2024 | Change | |
| BBI | 6.58 | 5.33 | 23.37% |
| JP Morgan EMBI | 915.96 | 914.70 | 0.14% |
| 5Y LEB | 93.90% | 112.60% | -1,870 |
| 10Y LEB | 89.40% | 108.80% | -1,940 |
| 5Y US | 3.62% | 3.55% | 7 |
| 10Y US | 3.85% | 3.79% | 6 |
| 5Y SPREAD | 9,028 | 10,905 | -1,877 |
| 10Y SPREAD | 8,555 | 10,501 | -1,946 |
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 significantly throughout the course of the week by 23.37%, to reach 6.58 points by October 3rd, 2024. Similarly, JP Morgan EMBI rose by 0.14% to stand at 915.96 points on October 3rd, 2024 compared to 914.7 points on September 26th, 2024.
The yield on the five-year (5Y) and the ten year (10Y) Lebanese Eurobonds decreased by 1,870 bps and 1,940 bps respectively to stand at 93.9% and 89.4% by the week ending October 3rd, 2024 compared to the previous week.
US yield curve shifted upward over the course of the week as one, five and ten years’ yields rose by 6, 7, and 6 bps to stand at 4.02%, 3.62% and 3.85% respectively on October 3rd, 2024 compared to the previous week.
The ten-year US Treasury yield fluctuated over the course of the week after the release of some economic and labor sector data in addition to the geopolitical tension in the Middle East.
Last Friday, the ten-year Treasury yield decreased from the three-week high of 3.8% to 3.76% after decent headline and core PCE prices increases, being Federal Reserve’s preferred measure of inflation in the US economy, implying the trend that inflation is heading towards Central Bank’s target. Later on, the ten-year Treasury yield rose to 3.79% on Tuesday as Federal Reserve Chair Jerome Powell stated that the Fed will decide on a conservative rate cut in its next meetings. As a result, markets lowered their expectations of 50 bps cuts from 53% to 36% compared to a 64% probability of a 25 bps cut. On Wednesday, the yield decreased reaching 3.73% due to mounting tension in the Middle East after Iran’s rocket firing against Israel and Israel’s potential response. On the economic front, US Job openings released by US Bureau of Labor Statistics rose by 329,000 to reach 8.04 million in August 2024 from an upwardly revised 7.71 million in July.
As such, economic and labor market data provide fresh evidence of the resilience of the US economy and labor market, limiting the urgency of aggressive interest rate cuts soon. The ISM services PMI rose to 54.9 in September well above the market anticipation of 51.7. Also, the latest report from Automatic Data Processing, Inc. (ADP) revealed that over 140,000 jobs were added to the private sector in September, above expectations of 120,000. In addition, on Thursday, US Labor Department released data regarding the labor market which were somehow decent. In details, despite the increase of US initial jobless claims, being the number of people claiming unemployment benefits, by 6,000 from the prior week to reach 225,000 on the period ending September 28th, the continuing jobless claims fell from 1,826 thousands from 1,827 thousands for the week ending September 21st, 2024. Furthermore, the four-week moving average for initial jobless claims that dismiss week-to-week volatility dropped to record 224.25 thousands. Note the unemployment rate increased to 4.2% over the course of 2024.
In turn, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparable decreased substantially by 1,877 and 1,946 bps to record 9,028 and 8,555 bps respectively by the week ending October 3rd, 2024.
| 5Y Credit Default Swaps (CDS) | ||
| 03/10/2024 | 26/09/2024 | |
| KSA | 65 | 59 |
| Dubai | 64 | 59 |
| Brazil | 147 | 155 |
| Turkey | 280 | 270 |
| Source: Bloomberg | ||
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 03/10/2024 | 26/09/2024 | Change | 03/10/2024 | 26/09/2024 | Change bps |
| 12/06/2025 | 6.25 | 8.021 | 6.482 | 23.74% | 1026.69% | 1140.87% | (11,417.62) |
| 28/11/2026 | 6.6 | 7.921 | 6.37 | 24.35% | 200.26% | 223.96% | (2,369.87) |
| 23/03/2027 | 6.85 | 7.944 | 6.438 | 23.39% | 177.77% | 200.42% | (2,264.23) |
| 29/11/2027 | 6.75 | 7.927 | 6.432 | 23.24% | 140.42% | 157.79% | (1,737.02) |
| 03/11/2028 | 6.65 | 7.926 | 6.369 | 24.45% | 115.49% | 132.12% | (1,662.92) |
| 26/02/2030 | 6.65 | 7.791 | 6.389 | 21.94% | 99.33% | 114.75% | (1,541.68) |
| 22/04/2031 | 7 | 7.924 | 6.371 | 24.38% | 94.47% | 112.73% | (1,825.90) |
| 23/03/2032 | 7 | 7.862 | 6.364 | 23.54% | 92.38% | 111.90% | (1,952.55) |
| 02/11/2035 | 7.05 | 7.926 | 6.421 | 23.44% | 88.25% | 107.78% | (1,953.16) |
| 23/03/2037 | 7.25 | 7.946 | 6.495 | 22.34% | 90.95% | 111.44% | (2,049.25) |
Source: BLOMInvest Bank
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