The eurobond market was mostly quiet last week, except for some attention paid to the new four-year $400 million sovereign bond issued by the ministry of finance last week in a deal managed by Credit Suisse
First Boston and J.P. Morgan. The paper was trading at a price of 100.75 on Wednesday, December 13, compared to par at issue. The bond at issue was priced to yield a 410 b.p. spread above equivalent maturity US government bonds. The Lebanese government has issued more than $1.4 billion of new eurobonds this year, just under the $1.5 billion limit set by Parliament when approving the 2000 budget.
Economic data took center stage for the US Treasury market this week, despite resolution of the US presidential election, helped by sagging stocks. A 0.4 percent drop in November retail sales was positively greeted by Treasuries, fanning hopes that the Federal Reserve’s next move on short-term rates would be downward. Further supporting the slowing economy, benign inflation scenario was a modest 0.2 percent rise in the November CPI. Added to that, the November Producer Price Index (PPI) rose only 0.1 percent, while the core PPI remained unchanged. The combined data overshadowed any disappointment over George W. Bush’s election victory. Bush’s proposed $1.3 trillion tax cuts over 10 years are seen as potentially jeopardizing the outgoing administration’s fiscal restraint program. ¯ ( Banque du Liban et d'Outre-Mer Sal )
© 2000 Mena Report (www.menareport.com)
