Eurozone Government Bond Issuance Is Expected to Fall 20% in Q3

Eurozone governments are expected to reduce total bond issuance in the third quarter, while net issuance is forecast to rise. According to Jin10, LBBW senior fixed-income analyst Elmar Voelker said total eurozone government bond issuance in the third quarter is expected to drop 20% from the second quarter to 323 billion euros. He added that net issuance, defined as total issuance minus redemptions, is expected to increase 5% to slightly below 110 billion euros. Voelker said the issuance outlook is based on national debt management offices continuing to follow established seasonal patterns, with bond supply typically slowing during the summer months. He noted that over the past four years, the quarter-on-quarter decline in total eurozone government bond issuance from the second quarter to the third quarter ranged from 18% to 23%. He also said the eurozone’s annual bond financing completion rate has reached 60%.