Emirates NBD Research - GCC Sukuk index update 30 July 2017
An eight per cent increase in oil prices and no new negative development on the Qatar front boosted investor confidence in the GCC risk.
CDS levels on GCC sovereign declined during the week with five year CDS spreads on Dubai closing at 120bps (-3bps), Saudi Arabia at 95bps (-5bps) and that on Qatar closing at 92bps (-3bps).
Healthy growth in 2Q GDP at an annualised rate of 2.6 per cent in the US reinstated future rate hike expectations, thereby leading to steepening of the UST curve. Yields on two year, five year, 10 year, and 30 year treasuries closed at 1.35 per cent (-1bp), 1.83 per cent (+1bp), 2.29 per cent (+3bps) and 2.90 per cent (+7bps) respectively. Across the pond, yields on 10 year Gilts and Bunds also closed higher during the week at 1.21 per cent (+2bps) and 0.54 per cent (+3bps) respectively as ECB halts its easing attitude.