US Bond Yields Slightly Down Amid Concerns On The Global Economic Recovery
| 05/08/2021 | 29/07/2021 | Change | Year to Date | |
| BLOM Bond Index (BBI) | 12.96 | 12.62 | 2.69% | -8.58% |
| Weighted Yield | 87.34% | 88.54% | -1.35% | 4.48% |
| Weighted Spread | 8,729 | 8,849 | -1.36% | 5.45% |
| 05/08/2021 | 29/07/2021 | Change | |
| BBI | 12.96 | 12.62 | 2.69% |
| JP Morgan EMBI | 932.95 | 928.66 | 0.46% |
| 5Y LEB | 75.20% | 78.00% | -280 |
| 10Y LEB | 57.78% | 59.25% | -147 |
| 5Y US | 0.72% | 0.73% | -1 |
| 10Y US | 1.23% | 1.28% | -5 |
| 5Y SPREAD | 7,448 | 7,727 | -279 |
| 10Y SPREAD | 5,655 | 5,797 | -142 |
For the week of 6 August, the newly nominated Prime Minister Najib Mikati continues to work on forming a new government, however, no common stand yet seem to be seen between himself and President Aoun.
Meenwhile, earlier today south Lebanon witnessed a serious situation; Hezbollah fired over more than 20 rockets at Israeli-occupied Shebaa Farms in response to two Israeli airstrikes on Thursday. With hope that nothing grander will take place in the loop.
As such, the BLOM Bond Index (BBI) which is BLOMInvest Bank’s market value-weighted index tracking the performance of the Lebanese government Eurobonds’ market (excluding coupon payments), increased by 2.69% to stand at 12.96 points by the week ending August 5, 2021 compared to the week of July 29, 2021. Meanwhile, the JP Morgan EMBI slightly increased from 928.66 to 932.95 during the period.
In addition, the yields on the 5 year (5Y) and 10 year (10Y) Lebanese Eurobonds dropped by 280 and 147 basis points (bps) to end the period at 75.20% and 57.78%, respectively.
In the US, the yields on 5 year and 10 year US treasuries recorded a slight decrease from the week ending July 29, 2021 from 0.73% and 1.28% to 0.72% and 1.23%, respectively, by the week ending 5 August, thus continuing with the sharp reversal in the bond market. In details, the 10-year U.S. Treasury yield fell on Thursday, its lowest point since February, following the low pace of the global economic recovery as well as the surge in inflation, and increase in the the Delta variant cases.
In turn, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparable colapsed from 7,727 bps and 5,797 bps to 7,448 bps and 5,655 respectively.
| 5Y Credit Default Swaps (CDS) | ||
| 05/08/2021 | 29/07/2021 | |
| Lebanon | . | . |
| KSA | 56 | 56 |
| Dubai | 91 | 92 |
| Brazil | 181 | 172 |
| Turkey | 392 | 382 |
| Source: Bloomberg | ||
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 05/08/2021 | 29/07/2021 | Change | 05/08/2021 | 29/07/2021 | Change bps |
| 27/01/2023 | 6.00 | 12.56 | 12.28 | 2.28% | 231.83% | 232.59% | -76 |
| 22/04/2024 | 6.65 | 12.43 | 12.07 | 2.98% | 121.76% | 123.29% | -153 |
| 04/11/2024 | 6.25 | 12.58 | 12.14 | 3.59% | 101.22% | 103.01% | -179 |
| 03/12/2024 | 7.00 | 12.12 | 12.05 | 0.57% | 105.05% | 105.05% | 0 |
| 26/02/2025 | 6.20 | 12.57 | 12.11 | 3.78% | 93.94% | 95.71% | -177 |
| 12/06/2025 | 6.25 | 12.69 | 12.53 | 1.29% | 87.51% | 87.96% | -45 |
| 28/11/2026 | 6.60 | 12.46 | 12.07 | 3.20% | 72.21% | 73.63% | -142 |
| 23/03/2027 | 6.85 | 12.57 | 12.15 | 3.45% | 70.70% | 72.23% | -152 |
| 29/11/2027 | 6.75 | 12.59 | 12.10 | 4.03% | 65.92% | 67.73% | -181 |
| 03/11/2028 | 6.65 | 12.47 | 12.08 | 3.24% | 61.74% | 63.16% | -142 |
| 26/02/2030 | 6.65 | 12.32 | 12.21 | 0.92% | 58.89% | 59.25% | -36 |
| 22/04/2031 | 7.00 | 12.61 | 12.22 | 3.22% | 57.88% | 59.44% | -156 |
| 23/03/2032 | 7.00 | 12.51 | 12.11 | 3.33% | 57.43% | 59.09% | -165 |
| 02/11/2035 | 7.05 | 12.60 | 12.23 | 3.02% | 55.82% | 57.43% | -161 |
| 23/03/2037 | 7.25 | 12.76 | 12.68 | 0.59% | 56.58% | 56.88% | -30 |
Source: BLOMInvest Bank
