Supportive technical situation for EA government bonds in H2 2021, but choppier times to follow
- 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.