Trading in Lebanese eurobonds was quiet as usual, particularly so at this time of year. Sovereigns witnessed some demand for the new December 04 bond, but supply was not forthcoming, with a similar story for the Republic 01 nearing maturity. Corporates, needless to say, were less than active, with both demand and supply lacking. Bloodletting in the stock market boosted US Treasuries as investors sought safe-havens to park their funds.
A Federal Reserve warning, after it left short-term rates unchanged, that a slowing economy risked a steeper downturn, sent stocks tumbling. At the same time, the likelihood of the Fed starting to reduce rates early in the new year appear to be increasing as the evidence of a slowing economy mounts. Third quarter GDP growth was revised downwards to 2.2 percent, while weekly jobless claims are rising, up to 354,000 for the week ending December 16 from 320,000 a week before. There are concerns that the Fed could be forced into a rates move by a drastic cut in consumer spending as people see the value of their equity holdings evaporate. ¯ ( Banque du Liban et d'Outre-Mer Sal )
© 2000 Mena Report (www.menareport.com)
