Highlights:

• Euro area treasurers have placed already almost 60% of the estimated annual sovereign bond volume in H1 2021.
• Amid the well-advanced euro area sovereign bond issuance and the elevated pace of ECB purchases net supply will be negative during H2.
• This will support euro area sovereign bonds going forward. However, the much less benign cash flow situation in 2022 casts its shadows ahead and confirms our expectation of rising yields.

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