Situation Room: Supply weighs a little

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Situation Room: Supply weighs a little

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Situation Room

Supply weighs a little

Credit Analysis

Supply weighs a little 29 June 2026

IG supply was heavy in June, and, not surprisingly, spreads are wider. Still, spreads Credit Strategy

widened less than typical. That means the demand is unusually strong. Issuance should United States

now slow down seasonally during the first half of July. In such a strong technical Cross Product

environment, spreads should grind tighter. Yuri Seliger

Credit Strategist

Demand less supply BofAS+1 646 855 7209

We track the known sources of bond supply and demand. The uses of funds are issuance yuri.seliger@bofa.com

and rising stars. The sources of funds include maturities, calls / tenders, coupons, fallen Sohyun Marie Lee

angels and IG fund / ETF flows. This supply less demand metric has reached the highest CreditBofAS Strategist

level since Mar-2026 and Nov-2025. However, the four-week spread widening is lower +1 646 855 7217

sohyun.lee@bofa.com

currently (+3bps) than in Mar-2026 (+14bps) or Nov-2025 (+9bps, Exhibit 1).

Record June supply In this report

The record June supply has certainly made IG market technicals more challenging. We are

currently tracking about $210bn for full month of June supply (assuming $10bn for Tue Daily supply snapshot

June 30th). That would be the highest for the calendar month on record (Exhibit 2).

Daily dealer inventories update

Normalizing by the YtD supply, June reached 18% of the issuance during the Jan-May

period. That is the highest ratio since 2021, when June supply was 19% of the prior five Daily HG fund flows

month issuance (Exhibit 3).

Daily foreign demand tracker

Slower supply to start July

Due to the 2Q earning reporting season, IG supply tends to seasonally slow during the