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Anita Yadav - Head of Fixed Income Research
Published Date: 09 December 2018
October was a tough month for most asset classes including the GCC bonds and sukuk, however November provided some respite. UST benchmark yield curve shifted downwards despite continued strong economic data out of the US as market participants priced-in the ultimate impact of the ongoing trade tensions on the US economy and the possibility of slower global growth in 2019. Financial markets remained unconvinced of the Fed’s ability to follow through with five more rate hikes that are projected in the current dot plot. Yield on 2yr, 5yr and 10yrs US treasuries closed the month of November at 2.79% (-8bps, m/m), 2.81% (-17bps, m/m) and 2.99% (-14bps, m/m).
The total return on Emirates NBD Markit iBoxx USD Sukuk index in November was a gain of +0.5% which fully offset a similar loss in the previous month. On yearly basis, the YTD total return on the sukuk index is a mild loss of -0.17%.
Looking at trading yields on various sukuk at the end of the month of November, following relative value observations are made:
In the sovereign sector :
Source: Markit,Emirates NBD Research
From LIBOR to SOFR
Interest Rates Monitor
GCC Credit Monitor