US Jobless Claims & Continuing Claims Beats Expectations 

	22/02/2024	15/02/2024	Change	Year to Date
BLOM Bond Index (BBI)	5.11	5.22	-2.11%	-15.26%
Weighted Yield	214.54%	207.43%	3.43%	144.30%
Weighted Spread	20,911	20,202	3.51%	138.27%

	22/02/2024	15/02/2024	Change
BBI	5.111	5.220	-2.09%
JP Morgan EMBI	838.34	838.17	0.02%
5Y LEB	123.70%	120.70%	300
10Y LEB	122.40%	118.70%	370
5Y US	4.33%	4.22%	11
10Y US	4.33%	4.24%	9
5Y SPREAD	11,937	11,648	289
10Y SPREAD	11,807	11,446	361

Although there are some positive political developments for electing a new president as the ambassadors of United States, France, Saudi Arabia, Qatar and Egypt are meeting and pushing for the elections, the escalating security issues at the Southern border and the war in Gaza are dominating the news this week. The Israel air attacks are expanding and reached 50km away from the Southern borders and targeting civilians and private industrial plants.

As such, the BLOM Bond Index (BBI) which is BLOMInvest Bank’s market value-weighted index tracking the performance of the Lebanese government Eurobond’s market (excluding coupon payments), declined throughout this week by 2.1% and stood at 5.11 points by February 22, 2024. As for the JP Morgan EMBI, it rose by 0.02% and stood at 838.34 on February 22, 2024 compared to 838.17 on February 15, 2024.

Moreover, the yield on the five-year (5Y) Lebanese Eurobonds increased by 300 bps to stand at 123.7%. Similarly, the yield on the ten-year (10Y) Lebanese Eurobonds increased by 370 bps to stand at 122.4% by the week ending February 22, 2024 compared to the prior week.

US yield curve shifted upward over the course of the week as one, five and ten years yields increased respectively by 9, 11 and 9 bps to stand at 5.02%, 4.33% and 4.33% by February 22, 2024 compared to the prior week.

Federal Reserve Vice chair Phillipe Jefferson stated on Thursday, in a presentation to the Peterson Institute for International Economics, that he needs to be convinced that it is the optimal time to cut interest rates after considering a broad set of economic indicators without getting indication when the first cut might occur. Moreover, Jefferson, upon answering the questions of investors and analysts, did not point out when the Fed’s policy easing might start; noting that investors are anticipating that the initial reduction in interest rates might begin in the June 11-12 meeting rather than March 19-20 meeting.

As per Labor Department data, US jobless claims decreased by 12,000 to stand at 201,000 by the end of week of February 17th below the market expectation of 218,000. Similarly, continuing claims – which measure the number of individuals who are filing for unemployment benefits for consecutive weeks – sank by 27,000 to 1,862,000 beating the expectation of 1,885,000. This data highlight a boost towards job creation.

In turn, the 5Y & 10Y spread between the yield on Lebanese Eurobonds and their US comparable recorded an upturn from 11,648 bps to 11,937 bps and from 11,446 bps to 11,807 bps respectively by the week ending February 22, 2024.

5Y Credit Default Swaps (CDS)
	22/02/2024	15/02/2024
KSA	53	52
Dubai	62	63
Brazil	128	131
Turkey	290	301
Source: Bloomberg

 Source: Bloomberg

Weekly Change of Lebanese Eurobonds Prices 

		Prices		Weekly	Yields		Weekly
Maturity	Coupon in %	22/02/2024	15/02/2024	Change	22/02/2024	15/02/2024	Change bps
26/02/2025	6.20	5.58	5.84	-4.32%	697.84%	648.89%	4895
12/06/2025	6.25	5.84	5.94	-1.67%	435.92%	423.69%	1223
28/11/2026	6.60	5.64	5.82	-3.01%	189.22%	184.99%	423
23/03/2027	6.85	5.66	5.79	-2.25%	176.45%	172.77%	368
29/11/2027	6.75	5.64	5.73	-1.59%	150.61%	148.72%	189
03/11/2028	6.65	5.63	5.77	-2.34%	132.22%	129.76%	246
26/02/2030	6.65	5.65	5.79	-2.52%	123.72%	120.48%	324
22/04/2031	7.00	5.64	5.63	0.09%	122.22%	122.12%	10
23/03/2032	7.00	5.64	5.73	-1.71%	122.39%	120.05%	234
02/11/2035	7.05	5.69	5.80	-1.90%	119.84%	117.62%	223
23/03/2037	7.25	5.64	5.58	1.02%	125.61%	126.37%	-77

Source: BLOMInvest Bank