Trump’s Federal Interference Weighs on US Treasuries
The BLOM Bond Index (BBI) fell by 0.32% in the past week to settle at 105.26 points this week. The Lebanese index was outpaced by the JP Morgan Emerging Markets’ Bond Index (EMBI), which rose by a weekly 0.71% to 785.86 points over the week.
Demand for Lebanese Eurobonds maturing in 5 and 10 years slipped over the past week as yields rose, respectively, from 5.75% and 6.63% in the past week to 5.80% and 6.71%, respectively, this week.
In the US, uncertainty amongst investors concerning the future of the outlook led the demand for long-term treasuries to rise as an aftermath of Trump interfering with the federal investigation between former White House national security adviser Michael Flynn and Russia.
As such, yields on 5 year stabilized at 1.78% while that of 10 year treasuries increased from 2.23% to 2.25%, this week.
The 5 year and 10 year spread between the Lebanese Eurobonds’ yields and the US treasuries widened from 397 bps and 440 bps, respectively, to 402 bps and 446 bps on May 25th.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 25/05/2017 | 18/05/2017 | |
| Lebanon | 385 | 382 |
| KSA | 93 | 95 |
| Dubai | 109 | 111 |
| Brazil | 241 | 265 |
| Turkey | 198 | 213 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 25/05/2017 | 18/05/2017 | Change | 25/05/2017 | 18/05/2017 | Change bps |
| 12/06/2018 | 5.15 | 100.5 | 100.75 | -0.25% | 4.65% | 4.42% | 23 |
| 12/11/2018 | 5.15 | 100.63 | 100.88 | -0.25% | 4.70% | 4.53% | 17 |
| 23/04/2019 | 5.5 | 100.7 | 100.88 | -0.18% | 5.11% | 5.01% | 10 |
| 20/05/2019 | 6 | 101.63 | 101.88 | -0.25% | 5.13% | 5.00% | 13 |
| 28/11/2019 | 5.45 | 100.38 | 100.75 | -0.37% | 5.29% | 5.13% | 16 |
| 09/03/2020 | 6.375 | 102.25 | 102.63 | -0.37% | 5.49% | 5.35% | 14 |
| 14/04/2020 | 5.8 | 100.63 | 101.13 | -0.49% | 5.56% | 5.37% | 19 |
| 19/06/2020 | 6.15 | 101.5 | 102 | -0.49% | 5.61% | 5.44% | 17 |
| 12/04/2021 | 8.25 | 108.63 | 108.75 | -0.11% | 5.73% | 5.71% | 2 |
| 04/10/2022 | 6.1 | 101.25 | 101.5 | -0.25% | 5.82% | 5.77% | 5 |
| 27/01/2023 | 6 | 100.63 | 101 | -0.37% | 5.87% | 5.79% | 8 |
| 22/04/2024 | 6.65 | 102.38 | 102.75 | -0.36% | 6.22% | 6.16% | 6 |
| 04/11/2024 | 6.25 | 99.75 | 100.13 | -0.38% | 6.29% | 6.23% | 6 |
| 03/12/2024 | 7.00 | 104 | 104.38 | -0.36% | 6.32% | 6.26% | 6 |
| 26/02/2025 | 6.20 | 99.13 | 99.25 | -0.12% | 6.34% | 6.32% | 2 |
| 12/06/2025 | 6.25 | 99.25 | 99.25 | 0.00% | 6.37% | 6.37% | 0 |
| 28/11/2026 | 6.60 | 100 | 100.5 | -0.50% | 6.60% | 6.53% | 7 |
| 23/03/2027 | 6.85 | 101.13 | 101.63 | -0.49% | 6.69% | 6.62% | 7 |
| 29/11/2027 | 6.75 | 100 | 100.75 | -0.74% | 6.75% | 6.65% | 10 |
| 03/11/2028 | 6.65 | 99.13 | 99.75 | -0.62% | 6.76% | 6.68% | 8 |
| 26/02/2030 | 6.65 | 98.88 | 99.25 | -0.37% | 6.78% | 6.74% | 4 |
| 22/04/2031 | 7.00 | 100.88 | 101 | -0.12% | 6.90% | 6.89% | 1 |
| 23/03/2032 | 7.00 | 100.38 | 100.75 | -0.37% | 6.96% | 6.92% | 4 |
| 02/11/2035 | 7.05 | 99 | 99.5 | -0.50% | 7.15% | 7.10% | 5 |
| 23/03/2037 | 7.25 | 100.25 | 100 | 0.25% | 7.22% | 7.25% | -3 |
