Euro area government issuance update: 3Q26: pressure on primary to ease after heavy 1H26

研报英文原文证据摘录

Euro area government issuance update: 3Q26: pressure on primary to ease after heavy 1H26

Summary

◼ 2026 gross bond issuance: forecast record €1.47tn vs. €1.39tn in 2025, mainly on higher German issuance and larger redemptions;

low risks of higher issuance due to Middle-East conflict/energy shock

◼ 2026 funding strategies: we do not expect delivering 2026 higher funding targets to be an issue especially given decent

frontloading; DMOs will continue using a variety of funding tools: bonds, T-bills, non-standard instruments including retail products,

syndicates/private placements, external support via NGEU and SAFE

◼ 2026 SSAs €-supply: record gross issuance on heavy EU issuance; risk of higher 2026 issuance due to Middle-East conflict/defense

spending is low in our view; 2026 EU gross issuance ~€180bn vs. €153bn in 2025; expect ongoing decline in EU issuance WAM; for 2027

we now expect gross EU issuance ~€120-150bn

◼ Smaller Euro area sovereigns: already covered more than 60% of their 2026 bond funding needs; 54% of YTD conventional

issuance has come via syndicated deals; Bulgaria issuance target revised higher reflecting upside risks to 2026 fiscal deficit

◼ 2H26 supply vs. ECB flow dynamics: favourable vs. 1H26 broadly across sovereigns mainly due to slowing issuance pace

◼ 3Q26 conventional issuance target: expect issuance pace to average ~€90-120bn in July and September and ~€70-80bn in

e August; net issuance to modestly decline in 3Q26 vs. 2Q26

t

a

d

p ◼ 10Y+ sector issuance in 3Q26: expect 10Y+ issuance to modestly decline vs. 2Q26

u

e

c

n ◼ Other sources of funding: expect lower green bond issuance in 2H vs. €38bn in 1H; expect ~€66bn linker issuance in 2026 vs.

u €63bn in 2025; T-bill issuance will be actively used across sovereigns to absorb funding volatility

s