Investors Prefer US Treasuries as the Trump Administration Fails to Repeal “Obamacare”
The BLOM Bond Index (BBI) gained 0.52% during the past week to settle at 104.39 points this week. Moreover, the index was outperformed by the JP Morgan Emerging Markets’ Bond Index (EMBI), which rose by 0.70% to stand at 790.38 points in the past week.
The yields on the Lebanese Eurobonds maturing in 5 and 10 years slipped to 6.21% and 6.80% from 6.30% and 6.88%, respectively, on July 20th.
In the US, yields on the 5 year and 10 year treasuries fell from 1.89% and 2.35% on July 13th to 1.82% and 2.27% this week. The yields continued to act on Yellen’s last week dovish testimony. In addition, investors preferred safe haven investments as their confidence in Trump’s pro-growth agenda was shaken this Monday following the congressional deadlock that failed to overhaul or repeal Obamacare.
The 5 year spread slipped by 2 basis points (bps) to 439 bps while the 10 year spread stabilized at 453 bps by July 20, 2017.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 20/07/2017 | 13/07/2017 | |
| Lebanon | 438 | 432 |
| KSA | 101 | 104 |
| Dubai | 123 | 123 |
| Brazil | 211 | 228 |
| Turkey | 181 | 194 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 20/07/2017 | 13/07/2017 | Change | 20/07/2017 | 13/07/2017 | Change bps |
| 12/06/2018 | 5.15 | 100.5 | 100.25 | 0.25% | 4.57% | 4.86% | -29 |
| 12/11/2018 | 5.15 | 100.5 | 100.25 | 0.25% | 4.75% | 4.95% | -20 |
| 23/04/2019 | 5.5 | 100.05 | 99.95 | 0.10% | 5.46% | 5.52% | -6 |
| 20/05/2019 | 6 | 100.88 | 100.75 | 0.13% | 5.48% | 5.56% | -8 |
| 28/11/2019 | 5.45 | 99.75 | 99.5 | 0.25% | 5.56% | 5.67% | -11 |
| 09/03/2020 | 6.375 | 101.75 | 101 | 0.74% | 5.65% | 5.96% | -31 |
| 14/04/2020 | 5.8 | 100.25 | 99.5 | 0.75% | 5.70% | 6.00% | -30 |
| 19/06/2020 | 6.15 | 101 | 100.25 | 0.75% | 5.77% | 6.05% | -28 |
| 12/04/2021 | 8.25 | 107.13 | 106.75 | 0.36% | 6.08% | 6.20% | -12 |
| 04/10/2022 | 6.1 | 99.38 | 99 | 0.38% | 6.24% | 6.33% | -9 |
| 27/01/2023 | 6 | 98.75 | 98.25 | 0.51% | 6.27% | 6.38% | -11 |
| 22/04/2024 | 6.65 | 100.88 | 100.5 | 0.38% | 6.48% | 6.55% | -7 |
| 04/11/2024 | 6.25 | 98.63 | 98.13 | 0.51% | 6.49% | 6.57% | -9 |
| 03/12/2024 | 7.00 | 102.88 | 102.38 | 0.49% | 6.50% | 6.59% | -9 |
| 26/02/2025 | 6.20 | 98.13 | 97.63 | 0.51% | 6.51% | 6.60% | -8 |
| 12/06/2025 | 6.25 | 98.13 | 97.63 | 0.51% | 6.56% | 6.64% | -8 |
| 28/11/2026 | 6.60 | 99.38 | 98.75 | 0.64% | 6.69% | 6.78% | -9 |
| 23/03/2027 | 6.85 | 100.5 | 99.88 | 0.62% | 6.78% | 6.87% | -9 |
| 29/11/2027 | 6.75 | 99.5 | 98.88 | 0.63% | 6.82% | 6.90% | -8 |
| 03/11/2028 | 6.65 | 98.38 | 97.75 | 0.64% | 6.86% | 6.94% | -8 |
| 26/02/2030 | 6.65 | 98 | 97.25 | 0.77% | 6.89% | 6.98% | -9 |
| 22/04/2031 | 7.00 | 100.25 | 99.63 | 0.62% | 6.97% | 7.04% | -7 |
| 23/03/2032 | 7.00 | 100 | 99.13 | 0.88% | 7.00% | 7.09% | -10 |
| 02/11/2035 | 7.05 | 99 | 98.25 | 0.76% | 7.15% | 7.22% | -8 |
| 23/03/2037 | 7.25 | 100.13 | 99.25 | 0.89% | 7.24% | 7.32% | -8 |
