European Rates – The Morning Call: Assessing demand trends for the EU

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European Rates – The Morning Call: Assessing demand trends for the EU

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22 Jul 2026 02:00:00 ET │ 10 pages

European Rates – The Morning Call

Assessing demand trends for the EU

CITI'S TAKE

Jussi Harju, CFA AC

#1 As 10y EU-OAT spreads are near their tightest since 2025, we look at +49-69-1366-5655

demand trends for the EU. We find that primary demand continues to rise jussi.harju@citi.com

led by syndications. In contrast, primary demand for EU auctions continued

to decline in 2026 and is currently the lowest on record despite the

introduction of non-competitive auctions last year. #2 Today's auctions:

€2bn of 15/21yr Bund – RV within.

Primary demand for EU syndications has continued to increase whilst that for

auctions has declined to a new record-low — As the 10y EU is currently trading near

at its tights versus OATs (Figure 1), we look at the primary demand trends for the EU.

The primary demand for EU bonds has reached its highest level since 2020 when the

SURE loan programme started. The aggregate bid-to-cover for all new EU primary

deals issued YTD was 9.8x, up from 9.3x the year before marking the fourth

consecutive yearly increase. Moreover, this was despite primary demand for other €

SSAs declining, albeit marginally, this year (Figure 2). That said, the increase has

been entirely driven by syndications that continued to attract significantly more

demand than EU auctions. The primary bid for YTD syndications reached 16.4x

(another all-time high, up from 15.6x in 2025) whereas for auctions it declined to 1.1x;

the lowest on record. In fact, the demand for EU auction bonds has declined every

year since their start in 2021, apart from brief respite in 2025 (Figure 3). This has

been despite the start of the non-competitive auctions in September 2025 that