Stronger US Economy Pushes US Treasury Yields Higher
The BLOM Bond Index (BBI) concluded the past two weeks falling by 0.57%, to stand at 100.37 points. Nonetheless, the JP Morgan Emerging Markets’ Bond Index (EMBI) registered a rise of 0.42% during the two weeks to close at 794.54 points.
The demand for 5 year (5Y) and 10Y Lebanese Eurobonds weakened during these two weeks as their respective yields rose from 6.58% and 7.51% to 6.71% and 7.71%.
In the USA, demand for treasury bills retracted as the Producer price data came in better than Wall Street’s expectations. Moreover, Initial claims for state unemployment benefits dropped 9,000 to 233,000 for the week ended April 7. Hence, the yields on the 5Y and 10Y US treasuries rose over the past two weeks, from 2.59% and 2.77% to 2.67% and 2.83%, respectively.
As such, the 5Y and 10Y spreads between the yield on the Lebanese Eurobonds and its US comparable widened from 399 basis points (bps) and 474 bps to 404 bps and 488 bps this week.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 12/04/2018 | 28/03/2018 | |
| Lebanon | 471 | 457 |
| KSA | 89 | 85 |
| Dubai | 107 | 106 |
| Brazil | 166 | 168 |
| Turkey | 201 | 202 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 12/04/2018 | 28/03/2018 | Change | 12/04/2018 | 28/03/2018 | Change bps |
| 23/04/2019 | 5.5 | 99.88 | 99.75 | 0.13% | 5.62% | 5.74% | -12 |
| 20/05/2019 | 6 | 100.38 | 100.25 | 0.13% | 5.63% | 5.76% | -13 |
| 28/11/2019 | 5.45 | 99.6 | 99.25 | 0.35% | 5.71% | 5.92% | -22 |
| 09/03/2020 | 6.375 | 100.5 | 100.5 | 0.00% | 6.09% | 6.10% | -1 |
| 14/04/2020 | 5.8 | 99.38 | 99.25 | 0.13% | 6.13% | 6.19% | -6 |
| 19/06/2020 | 6.15 | 99.88 | 99.75 | 0.13% | 6.20% | 6.27% | -6 |
| 12/04/2021 | 8.25 | 104.63 | 104.88 | -0.24% | 6.53% | 6.45% | 7 |
| 04/10/2022 | 6.1 | 97.25 | 97.88 | -0.64% | 6.82% | 6.65% | 17 |
| 27/01/2023 | 6 | 96.38 | 97 | -0.64% | 6.90% | 6.74% | 16 |
| 22/04/2024 | 6.65 | 97.75 | 98.5 | -0.76% | 7.11% | 6.96% | 16 |
| 04/11/2024 | 6.25 | 95.25 | 96 | -0.78% | 7.17% | 7.02% | 15 |
| 03/12/2024 | 7.00 | 98.88 | 99.5 | -0.62% | 7.21% | 7.09% | 12 |
| 26/02/2025 | 6.20 | 94.5 | 94.88 | -0.40% | 7.23% | 7.15% | 8 |
| 12/06/2025 | 6.25 | 94.38 | 94.75 | -0.39% | 7.27% | 7.19% | 7 |
| 28/11/2026 | 6.60 | 93.63 | 94.75 | -1.18% | 7.62% | 7.43% | 19 |
| 23/03/2027 | 6.85 | 94.5 | 95.75 | -1.31% | 7.71% | 7.51% | 20 |
| 29/11/2027 | 6.75 | 93.5 | 94.63 | -1.19% | 7.72% | 7.54% | 18 |
| 03/11/2028 | 6.65 | 92.25 | 93.38 | -1.21% | 7.74% | 7.57% | 17 |
| 26/02/2030 | 6.65 | 90.38 | 91.5 | -1.22% | 7.91% | 7.75% | 16 |
| 22/04/2031 | 7.00 | 92.5 | 93.38 | -0.94% | 7.93% | 7.82% | 12 |
| 23/03/2032 | 7.00 | 92 | 92.75 | -0.81% | 7.96% | 7.86% | 10 |
| 02/11/2035 | 7.05 | 91.25 | 92.13 | -0.96% | 7.98% | 7.88% | 10 |
| 23/03/2037 | 7.25 | 92 | 93.13 | -1.21% | 8.08% | 7.96% | 12 |
