- Euro area sovereign treasurers have placed already more than 30% of the estimated annual sovereign bond issuance in Q1 2021.
- The focus has remained on very long-dated bonds. Almost half of all newly issued sovereign bonds have a maturity of 10 years or more.
- The ECB’s PEPP purchases were initially lower than expected and only recently the central bank has increased the volume. This, as well as the reflation trade and sharp UST sell-off, contributed to the worst total return in a first quarter for more than 30 years.
- The technical situation will improve in the next quarter. Not only will the ECB buy more, but also the bond supply will decrease.