Concerns over Trade Wars Push U.S Treasury Yields down This Week
Lebanon’s BLOM Bond Index (BBI) dropped by 1.96% over the past week to reach 90.06 points. As for the JP Morgan Emerging Markets’ Bond Index (EMBI), it recorded a marginal increase of 0.07% and reached 764.59 points.
Yields on the 5 year (5Y) and 10Y Lebanese Eurobonds rose from last week’s 9.12% and 9.60% to 9.63% and 10.10% this week, respectively.
In the US, the yields on the 5Y and 10Y treasury bills declined from last week’s 2.85% and 2.94% to this week’s 2.81% and 2.90%, respectively. In reality, global worries about the China-US trade war this week led investors back to the safe-haven assets which, in turn, pushed their yields down.
Meanwhile, the 5Y and 10Y spreads between the yield on the Lebanese Eurobonds and their US comparable widened from last week’s 627 basis points (bps) and 666 bps to 682 bps and 720 bps, respectively.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 5Y Credit Default Swaps (CDS) | ||
| 6/21/2018 | 6/13/2018 | |
| Lebanon | 655 | 633 |
| KSA | 97 | 92 |
| Dubai | 133 | 126 |
| Brazil | 268 | 264 |
| Turkey | 314 | 300 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 6/21/2018 | 6/14/2018 | Change | 6/21/2018 | 6/14/2018 | Change bps |
| 11/28/2019 | 5.45 | 97 | 97.25 | -0.26% | 7.69% | 7.48% | 21 |
| 3/9/2020 | 6.375 | 96.75 | 97.13 | -0.39% | 8.43% | 8.17% | 26 |
| 4/14/2020 | 5.8 | 95.5 | 95.88 | -0.40% | 8.52% | 8.26% | 26 |
| 6/19/2020 | 6.15 | 95.63 | 96 | -0.39% | 8.58% | 8.35% | 23 |
| 4/12/2021 | 8.25 | 97.38 | 98.38 | -1.02% | 9.27% | 8.90% | 37 |
| 10/4/2022 | 6.1 | 87.5 | 89.25 | -1.96% | 9.63% | 9.17% | 46 |
| 1/27/2023 | 6 | 86.13 | 87.88 | -1.99% | 9.70% | 9.28% | 42 |
| 4/22/2024 | 6.65 | 86 | 87.75 | -1.99% | 9.76% | 9.42% | 35 |
| 11/4/2024 | 6.25 | 83.13 | 84.88 | -2.06% | 9.79% | 9.45% | 33 |
| 12/3/2024 | 7.00 | 86.38 | 88.25 | -2.12% | 9.82% | 9.47% | 35 |
| 2/26/2025 | 6.20 | 82 | 84 | -2.38% | 9.86% | 9.48% | 38 |
| 6/12/2025 | 6.25 | 81.63 | 83.63 | -2.39% | 9.88% | 9.51% | 37 |
| 11/28/2026 | 6.60 | 80.75 | 83 | -2.71% | 9.98% | 9.58% | 41 |
| 3/23/2027 | 6.85 | 81.25 | 84 | -3.27% | 10.03% | 9.58% | 44 |
| 11/29/2027 | 6.75 | 80.25 | 82.63 | -2.88% | 9.94% | 9.58% | 36 |
| 11/3/2028 | 6.65 | 78.5 | 80.88 | -2.94% | 9.94% | 9.60% | 34 |
| 2/26/2030 | 6.65 | 77.5 | 80 | -3.13% | 9.88% | 9.52% | 36 |
| 4/22/2031 | 7.00 | 78.5 | 81.38 | -3.54% | 9.86% | 9.54% | 32 |
| 3/23/2032 | 7.00 | 78.25 | 80.63 | -2.95% | 9.87% | 9.56% | 31 |
| 11/2/2035 | 7.05 | 77 | 79.5 | -3.14% | 9.73% | 9.48% | 25 |
| 3/23/2037 | 7.25 | 77.75 | 80.5 | -3.42% | 9.80% | 9.49% | 31 |
