European Government Bond Trading Reaches Record

Shanny Basar
Trading Europe From ‘Across the Pond’

AFME is pleased to circulate its Q1 2022 Government Bond Data Report.

This report provides a comprehensive data source with updated statistics on the Government bond primary and secondary markets in Europe (EU+UK).

Key highlights

  • European (EU+UK) government bonds and bills issuance continue above pre-pandemic levels with EUR 776.2 bn issued throughout 1Q22, which represents an increase of 24.3% (QoQ) compared to 4Q21, and a decrease of 16.3% (YoY) compared to 1Q21.
  • During Q1 2022, European quarterly traded volumes increased 31.4% (QoQ) and 17.5% (YoY), according to Trax, a MarketAxess subsidiary. The traded amount was also a quarterly record since records began in 2013.
  • Outstanding amount of European ESG government bonds reached EUR 257 bn during 1Q22. Volumes were driven primarily by tap issuance in France (EUR 5.0 bn), Germany (EUR 3.9bn) and the European Commission (EUR 2.5 bn). Denmark issued an inaugural green bond during Q1 2022 bringing the total number of sovereign issuers in European ESG markets to 17 with active participation by over half (55.6%) of EU Member States.
  • 10Y spot yields rise during 2022 year-to-date, more predominantly in Eastern Europe, amid heightened market volatility, central bank policy tightening, and the start of the Russian invasion of Ukraine.
  • Credit quality: During 1Q22 there was 1 long-term credit rating upgrade for European countries and no downgrades. This brings the full-year total to 3 upgrades and no downgrades (there were 2 further upgrades in Q2 2022 to date). Greece, which was upgraded one notch by S&P, now has the highest long-term credit rating since March 2011.

Source: AFME

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