EGBs: Private sector must (almost) absorb the issuance volume on its own

In Kürze

To a certain extent unnoticed given the turmoil in financial markets, there has been a structural turnaround in the European bond markets since the beginning of March.

Highlights:

  • Given the ECB’s Quantitative Tightening (QT), 2023 differs significantly from recent years in terms of the issuance volume to be taken down by the private sector. Since March, the ECB has only partially invested maturing bonds. We deem it likely that from July onwards, the ECB will hardly reinvest PSPP government bonds.
  • Accordingly, EA net-net government bond issuance will rise to the highest level since the Great Financial Crisis in 2023. Aware of the tight technical situation, EA treasurers pushed ahead with issuing activity in Q1 and have already placed more than 30% of the scheduled annual volume.
  • As in previous years, ESG bonds are also issued. Given the low volume, however, ESG bonds remain a niche product in the EA sovereign bond market.
  • Given the partial withdrawal of the ECB, the technical situation will remain tense for the remainder of the year and into 2024, somewhat slowing the expected decline in yields over the next months.

 

Download the publication below:

EGBs: Private sector must (almost) absorb the issuance volume on its own
Picture

© Generali Investments, alle Rechte vorbehalten. Diese Webseite wird von Generali Investments zur Verfügung gestellt und gilt als Marketingkommunikation und Finanzwerbung in Bezug auf die Produkte und Dienstleistungen der folgenden Unternehmen der Generali Gruppe: Generali Asset Management S.p.A. Società di gestione del risparmio und Generali Investments Luxembourg S.A (im Folgenden zusammengefasst Generali Investments). Darüber hinaus kann die Webseite Marketingkommunikation und Finanzwerbung für Produkte und Dienstleistungen von Unternehmen enthalten, die Teil der von Generali Investments Partners S.p.A. Società di gestione del risparmio koordinierten Plattform sind, insbesondere von Infranity, Sycomore Asset Management, Aperture Investors LLC, Plenisfer Investments SGR, Lumyna Investments, Sosteneo Infrastructure Partners SGR und Generali Real Estate S.p.A. Società di Gestione del Risparmio.