Investors Opt for US Treasuries as Mixed Economic Data Propagates Uncertainty
Over the past week, the BLOM Bond Index (BBI) rose by 0.16% to settle at 104.66 points, while it was still surpassed by the JP Morgan Emerging Markets’ Bond Index (EMBI) which gained 0.58%, to end the week at 794.64 points.
The yields on the Lebanese Eurobonds maturing in 5 and 10 years slipped from last week’s 6.18% and 6.78% to 6.13% and 6.73% this week, respectively.
In the US, demand on treasuries rose for myriad factors over the week. A Grand Jury was impanelled in Washington on Thursday to investigate the Russian interference in the US 2016 presidential elections which worried investors, over the week . Moreover, the week’s release of economic data revealed a monthly slip in the manufacturing index as well as the price index for personal consumption expenses, which left investors anxious over the economy and the Fed’s monetary stance in the coming period.
As such, the yields on the 5 year and 10 year treasuries contracted from 1.84% and 2.32% last week to 1.79% and 2.24% this week, respectively.
The 5 Year spread between the Lebanese Eurobonds and their US comparable remained stable at 434 basis points (bps), while the 10 year spread rose from last week’s 446 bps to 449 bps, this week.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 03/08/2017 | 27/07/2017 | |
| Lebanon | 421 | 425 |
| KSA | 90 | 95 |
| Dubai | 113 | 120 |
| Brazil | 201 | 215 |
| Turkey | 175 | 183 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 03/08/2017 | 27/07/2017 | Change | 03/08/2017 | 27/07/2017 | Change bps |
| 12/06/2018 | 5.15 | 100.5 | 100.45 | 0.05% | 4.54% | 4.61% | -7 |
| 12/11/2018 | 5.15 | 100.5 | 100.45 | 0.05% | 4.74% | 4.78% | -5 |
| 23/04/2019 | 5.5 | 100.25 | 100.15 | 0.10% | 5.34% | 5.40% | -6 |
| 20/05/2019 | 6 | 101.13 | 101 | 0.13% | 5.33% | 5.41% | -8 |
| 28/11/2019 | 5.45 | 99.88 | 99.88 | 0.00% | 5.50% | 5.50% | 0 |
| 09/03/2020 | 6.375 | 101.88 | 101.75 | 0.13% | 5.59% | 5.64% | -6 |
| 14/04/2020 | 5.8 | 100.25 | 100.25 | 0.00% | 5.69% | 5.70% | 0 |
| 19/06/2020 | 6.15 | 101 | 101 | 0.00% | 5.76% | 5.77% | 0 |
| 12/04/2021 | 8.25 | 107.38 | 107.38 | 0.00% | 5.99% | 6.00% | -1 |
| 04/10/2022 | 6.1 | 99.75 | 99.5 | 0.25% | 6.15% | 6.21% | -6 |
| 27/01/2023 | 6 | 98.75 | 98.63 | 0.12% | 6.27% | 6.30% | -3 |
| 22/04/2024 | 6.65 | 101.13 | 101 | 0.13% | 6.44% | 6.46% | -2 |
| 04/11/2024 | 6.25 | 98.88 | 98.75 | 0.13% | 6.44% | 6.47% | -2 |
| 03/12/2024 | 7.00 | 103.13 | 103 | 0.13% | 6.46% | 6.48% | -2 |
| 26/02/2025 | 6.20 | 98.38 | 98.25 | 0.13% | 6.47% | 6.49% | -2 |
| 12/06/2025 | 6.25 | 98.38 | 98.25 | 0.13% | 6.52% | 6.54% | -2 |
| 28/11/2026 | 6.60 | 100 | 99.63 | 0.37% | 6.60% | 6.65% | -5 |
| 23/03/2027 | 6.85 | 101 | 100.63 | 0.37% | 6.71% | 6.76% | -5 |
| 29/11/2027 | 6.75 | 100 | 99.63 | 0.37% | 6.75% | 6.80% | -5 |
| 03/11/2028 | 6.65 | 98.5 | 98.38 | 0.12% | 6.84% | 6.86% | -2 |
| 26/02/2030 | 6.65 | 98.5 | 98.25 | 0.25% | 6.83% | 6.86% | -3 |
| 22/04/2031 | 7.00 | 100.38 | 100.13 | 0.25% | 6.95% | 6.98% | -3 |
| 23/03/2032 | 7.00 | 100.13 | 99.88 | 0.25% | 6.98% | 7.01% | -3 |
| 02/11/2035 | 7.05 | 99.38 | 99 | 0.38% | 7.11% | 7.15% | -4 |
| 23/03/2037 | 7.25 | 100.38 | 100.13 | 0.25% | 7.21% | 7.24% | -2 |
