US Mixed Economic Data Released this Week Raises Caution among Investors
The BLOM Bond Index (BBI) marginally rose by 0.34% in the past week to settle at 105.62 points this week. The Lebanese index outpaced the JP Morgan Emerging Markets’ Bond Index (EMBI), with the latter rising by a weekly 0.21% to 787.5 points over the week.
Demand for Lebanese Eurobonds maturing in 5 and 10 years grew over the past week as yields slipped, respectively, from 5.8% and 6.71% in the past week to 5.74% and 6.63% this week.
In the US, demand for treasuries rose, fuelled by investors rebalancing their portfolios by the end of the month and by mixed economic data published during the week. While US private payroll data nurtured optimism regarding an expected interest rate hike in June 2017, housing purchases data revealed a contracting housing market which raised caution among investors.
As such, yields on 5 year and 10 year treasuries decreased from 1.78% and 2.25% to 1.76% and 2.21%, respectively, this week.
The 5 year spread between the Lebanese Eurobonds’ yields and the US treasuries widened from 402 bps to 498 bps, while the 10 year spread fell from 446 bps to 442 bps on June 1st.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 01/06/2017 | 25/05/2017 | |
| Lebanon | 383 | 385 |
| KSA | 89 | 93 |
| Dubai | 106 | 109 |
| Brazil | 237 | 241 |
| Turkey | 196 | 198 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 01/06/2017 | 25/05/2017 | Change | 01/06/2017 | 25/05/2017 | Change bps |
| 12/06/2018 | 5.15 | 100.63 | 100.5 | 0.13% | 4.52% | 4.65% | -13 |
| 12/11/2018 | 5.15 | 100.75 | 100.63 | 0.12% | 4.61% | 4.70% | -9 |
| 23/04/2019 | 5.5 | 101.05 | 100.7 | 0.35% | 4.91% | 5.11% | -20 |
| 20/05/2019 | 6 | 102 | 101.63 | 0.36% | 4.92% | 5.13% | -21 |
| 28/11/2019 | 5.45 | 100.88 | 100.38 | 0.50% | 5.07% | 5.29% | -22 |
| 09/03/2020 | 6.375 | 102.5 | 102.25 | 0.24% | 5.39% | 5.49% | -10 |
| 14/04/2020 | 5.8 | 100.88 | 100.63 | 0.25% | 5.46% | 5.56% | -10 |
| 19/06/2020 | 6.15 | 101.8 | 101.5 | 0.30% | 5.50% | 5.61% | -11 |
| 12/04/2021 | 8.25 | 109.13 | 108.63 | 0.46% | 5.59% | 5.73% | -14 |
| 04/10/2022 | 6.1 | 101.38 | 101.25 | 0.13% | 5.79% | 5.82% | -3 |
| 27/01/2023 | 6 | 100.38 | 100.63 | -0.25% | 5.92% | 5.87% | 5 |
| 22/04/2024 | 6.65 | 102.25 | 102.38 | -0.13% | 6.24% | 6.22% | 2 |
| 04/11/2024 | 6.25 | 99.75 | 99.75 | 0.00% | 6.29% | 6.29% | 0 |
| 03/12/2024 | 7.00 | 104.13 | 104 | 0.12% | 6.30% | 6.32% | -2 |
| 26/02/2025 | 6.20 | 99.38 | 99.13 | 0.25% | 6.30% | 6.34% | -4 |
| 12/06/2025 | 6.25 | 99.5 | 99.25 | 0.25% | 6.33% | 6.37% | -4 |
| 28/11/2026 | 6.60 | 100.63 | 100 | 0.63% | 6.51% | 6.60% | -9 |
| 23/03/2027 | 6.85 | 101.63 | 101.13 | 0.49% | 6.62% | 6.69% | -7 |
| 29/11/2027 | 6.75 | 100.63 | 100 | 0.63% | 6.67% | 6.75% | -8 |
| 03/11/2028 | 6.65 | 99.63 | 99.13 | 0.50% | 6.70% | 6.76% | -6 |
| 26/02/2030 | 6.65 | 99.13 | 98.88 | 0.25% | 6.75% | 6.78% | -3 |
| 22/04/2031 | 7.00 | 101.13 | 100.88 | 0.25% | 6.87% | 6.90% | -3 |
| 23/03/2032 | 7.00 | 100.63 | 100.38 | 0.25% | 6.93% | 6.96% | -3 |
| 02/11/2035 | 7.05 | 100 | 99 | 1.01% | 7.05% | 7.15% | -10 |
| 23/03/2037 | 7.25 | 101.38 | 100.25 | 1.13% | 7.12% | 7.22% | -10 |
