Robust US GDP Data Drove Down Demand for US Treasuries
The Blom Bond Index (BBI) rose by 0.33% over the week to stand at 100.72 points by December 21, 2017. The BBI outperformed the JP Morgan Emerging Markets’ Bond Index (EMBI) which registered a 0.08% downtick to stand at 805.48 points.
The BBI was boosted by higher demand on the Lebanese Eurobonds maturing in 5 years (5Y) since their yield slid from last week’s 7.10% to 7.00% this week. Meanwhile, the yield on the 10 Year Lebanese Eurobonds remained unchanged at 7.50%.
As such, the 5Y and 10Y spreads between the Lebanese Eurobonds and their US comparable narrowed from last week’s 496 basis points (bps) and 515 bps to 474 bps and 502 bps, respectively.
Demand for safe-haven US treasuries dropped this past week as the third quarter’s GDP reached 3.2%, its fastest pace in over two years. Accordingly, the yields on the 5Y and 10Y US treasuries rose from 2.14% and 2.35% to 2.26% and 2.48%, respectively.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 21/12/2017 | 14/12/2017 | |
| Lebanon | 521 | 532 |
| KSA | 92 | 94 |
| Dubai | 153 | 153 |
| Brazil | 165 | 167 |
| Turkey | 169 | 181 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 21/12/2017 | 14/12/2017 | Change | 21/12/2017 | 14/12/2017 | Change bps |
| 23/04/2019 | 5.5 | 99.5 | 99.13 | 0.37% | 5.89% | 6.17% | -28 |
| 20/05/2019 | 6 | 100.13 | 99.75 | 0.38% | 5.90% | 6.18% | -28 |
| 28/11/2019 | 5.45 | 99.13 | 98.5 | 0.64% | 5.93% | 6.28% | -35 |
| 09/03/2020 | 6.375 | 99.88 | 99.25 | 0.63% | 6.43% | 6.74% | -31 |
| 14/04/2020 | 5.8 | 98.5 | 98 | 0.51% | 6.50% | 6.74% | -23 |
| 19/06/2020 | 6.15 | 99 | 98.63 | 0.38% | 6.59% | 6.75% | -16 |
| 12/04/2021 | 8.25 | 104.38 | 103.75 | 0.61% | 6.75% | 6.96% | -22 |
| 04/10/2022 | 6.1 | 97 | 96.5 | 0.52% | 6.84% | 6.97% | -12 |
| 27/01/2023 | 6 | 95.75 | 95.5 | 0.26% | 7.00% | 7.06% | -6 |
| 22/04/2024 | 6.65 | 97.38 | 96.75 | 0.65% | 7.17% | 7.30% | -13 |
| 04/11/2024 | 6.25 | 94.88 | 94.38 | 0.53% | 7.21% | 7.30% | -9 |
| 03/12/2024 | 7.00 | 98.63 | 98.38 | 0.25% | 7.25% | 7.30% | -5 |
| 26/02/2025 | 6.20 | 94 | 93.88 | 0.13% | 7.29% | 7.31% | -2 |
| 12/06/2025 | 6.25 | 94 | 93.75 | 0.27% | 7.31% | 7.35% | -4 |
| 28/11/2026 | 6.60 | 95.25 | 94.75 | 0.53% | 7.33% | 7.41% | -8 |
| 23/03/2027 | 6.85 | 96.38 | 95.88 | 0.52% | 7.39% | 7.47% | -8 |
| 29/11/2027 | 6.75 | 95.13 | 94.88 | 0.26% | 7.45% | 7.49% | -4 |
| 03/11/2028 | 6.65 | 93.5 | 93.5 | 0.00% | 7.54% | 7.53% | 0 |
| 26/02/2030 | 6.65 | 91.88 | 92.25 | -0.40% | 7.69% | 7.64% | 5 |
| 22/04/2031 | 7.00 | 93.88 | 94.25 | -0.39% | 7.74% | 7.69% | 5 |
| 23/03/2032 | 7.00 | 92.88 | 93.5 | -0.66% | 7.84% | 7.76% | 8 |
| 02/11/2035 | 7.05 | 92.13 | 92.25 | -0.13% | 7.88% | 7.86% | 1 |
| 23/03/2037 | 7.25 | 92 | 91.75 | 0.27% | 8.07% | 8.10% | -3 |
