24 Sep 2017

Government Bond Data Report: Q2 2017

AFME is pleased to circulate its Q2 2017 Government Bond Data Report.

This report provides a comprehensive data source with updated statistics of the Government bond primary and secondary markets in Europe (EU28).

Among the main findings of this report:

  • Average daily trading volumes of EU sovereign bonds increased 9.8% when comparing 2Q17 with 2Q16. The annual increase, however, does not significantly improve the decreasing trend in trading activity for many countries in recent years, particularly illustrated by the turnover ratio. The YoY increase in trading volume was primarily driven by significantly higher activity in France, as well as the UK.
  • European Government bond gross issuance totalled €626.8 bn in 2Q17, a decrease of 8.7% from the volume originated in 1Q17 (€686.3 bn). Comparing issuance in 1H17 with 1H16, there has been a shift to longer dated debt, as bond issuance has increased 5.7%, whereas bill issuance has decreased 14.4%. 
  • Sovereign green bond (SGB) issuance: After Poland issued the first SGB in December 2016 (a €750m 5-year bond), France followed with the issuance of a €7bn 22-year green bond in January 2017. The French SGB was reopened in June 2017 to increase the issuance size from €7bn to €8.63bn, and thus further growing the size of the fledgling market.
  • Average bid-cover ratios was 2.11 in 2Q17, a slight increase compared to 1Q17, but still close to the lowest value of 2.07 since 2011. 
  • The year so far has seen nine long-term credit rating upgrades for EU countries compared to one downgrade, reflecting a general trend of increasing credit ratings for Southern and Eastern European countries. 

Annual change in Government Bond average trading volumes

(2Q17 vs 2Q16) Selected European jurisdictions

Source: AFME with information from European DMOs and other agency sources and Trax, a MarketAxess subsidiary