EGBs: Record issuance volume in Q1, but more to come

Highlights:

• Euro area treasurers are on their way to setting a new record gross government bond issuance volume in 2024. In Q1, they issued over € 450bn in new bonds, around 35% of the scheduled annual volume.
• At over 40%, the proportion of very long-dated bonds has been comparatively high. Nevertheless, the supply met with solid demand from foreign and domestic investors. Many issuances were oversubscribed, and the new bonds were easily absorbed.
• The ECB’s tapering of PEPP reinvestments from July onwards will be a headwind, though. € 430bn of the € 670bn net-net issuance is yet to be placed on the market by the end of 2024.
• The share of ESG bonds is seen to remain stable at around 5%, consistent with previous years.
   

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