Low Demand on US Treasuries as the FOMC Keeps Interest Rates Unchanged
The yields on the Lebanese Eurobonds maturing in 5years (Y( narrowed from 6.23% to 6.10% this week, while the yields on the 10Y bonds remained unchanged at 6.79%.
Over the past week, the BLOM Bond Index (BBI) marginally ticked up by 0.01%, to end the week at 104.43 points. It surpassed the JP Morgan Emerging Markets’ Bond Index (EMBI) which slid by 0.45% and stood at 803.07 points.
In the US, demand on treasuries was low as the FOMC announced its expected decision to keep interest rates unchanged, yet forecasted a third rate hike in December 2017 as well as a kick-start to the reduction of the FED’s balance sheet in October. As such, yields on the 10 year T-bills rose to their highest levels since Aug.8, 2017, that is, from 2.20% to 2.28% this week, while yields on the 5Y T-bills also reached 1.89% this week, up from 1.79% on September 14th.
The 5Y and 10Y spreads between the Lebanese Eurobonds and their US comparable declined from 444 bps and 459 bps to 421 bps and 451 bps, respectively.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 20/09/2017 | 14/09/2017 | |
| Lebanon | 445 | 432 |
| KSA | 90 | 83 |
| Dubai | 149 | 140 |
| Brazil | 204 | 182 |
| Turkey | 186 | 163 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 20/09/2017 | 14/09/2017 | Change | 20/09/2017 | 14/09/2017 | Change bps |
| 12/11/2018 | 5.15 | 100.38 | 100.7 | -0.32% | 4.80% | 4.52% | 28 |
| 23/04/2019 | 5.5 | 100.88 | 100.88 | 0.00% | 4.92% | 4.92% | -1 |
| 20/05/2019 | 6 | 101.63 | 101.7 | -0.07% | 4.96% | 4.93% | 3 |
| 28/11/2019 | 5.45 | 100.75 | 100.75 | 0.00% | 5.08% | 5.08% | 0 |
| 09/03/2020 | 6.375 | 102.25 | 102.25 | 0.00% | 5.39% | 5.40% | -1 |
| 14/04/2020 | 5.8 | 100.6 | 100.63 | -0.03% | 5.54% | 5.53% | 1 |
| 19/06/2020 | 6.15 | 101.25 | 101.25 | 0.00% | 5.65% | 5.65% | 0 |
| 12/04/2021 | 8.25 | 107.88 | 107.75 | 0.12% | 5.77% | 5.82% | -5 |
| 04/10/2022 | 6.1 | 99.88 | 99.38 | 0.50% | 6.13% | 6.24% | -12 |
| 27/01/2023 | 6 | 98.75 | 98.88 | -0.13% | 6.28% | 6.25% | 3 |
| 22/04/2024 | 6.65 | 101 | 101 | 0.00% | 6.46% | 6.46% | 0 |
| 04/11/2024 | 6.25 | 98.63 | 98.63 | 0.00% | 6.49% | 6.49% | 0 |
| 03/12/2024 | 7.00 | 102.75 | 102.75 | 0.00% | 6.51% | 6.51% | 0 |
| 26/02/2025 | 6.20 | 97.88 | 98 | -0.12% | 6.56% | 6.54% | 2 |
| 12/06/2025 | 6.25 | 97.88 | 97.88 | 0.00% | 6.60% | 6.60% | 0 |
| 28/11/2026 | 6.60 | 99.25 | 99.25 | 0.00% | 6.71% | 6.71% | 0 |
| 23/03/2027 | 6.85 | 100.5 | 100.5 | 0.00% | 6.78% | 6.78% | 0 |
| 29/11/2027 | 6.75 | 99.63 | 99.63 | 0.00% | 6.80% | 6.80% | 0 |
| 03/11/2028 | 6.65 | 98 | 98.13 | -0.13% | 6.91% | 6.89% | 2 |
| 26/02/2030 | 6.65 | 97.38 | 97.5 | -0.12% | 6.97% | 6.95% | 1 |
| 22/04/2031 | 7.00 | 99.25 | 99.38 | -0.13% | 7.09% | 7.07% | 2 |
| 23/03/2032 | 7.00 | 99 | 99 | 0.00% | 7.11% | 7.11% | 0 |
| 02/11/2035 | 7.05 | 98.38 | 98.13 | 0.25% | 7.21% | 7.24% | -3 |
| 23/03/2037 | 7.25 | 98.75 | 98.88 | -0.13% | 7.37% | 7.36% | 1 |
