AFME Government Bond Data Report Q2 2023 | AFME

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Data Research
AFME Government Bond Data Report Q2 2023
17 Oct 2023
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Author Julio Suarez Director
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Report highlights include:

  • EU Member States and the UK issued EUR 898 bn in bonds and bills throughout 2Q23, which represents a decrease of 5% (QoQ) compared to 1Q23, and an increase of 21% (YoY) compared to 2Q22. The UK has had the largest nominal increase in total (bond and bill) issuance in H1 2023, with volumes up 78%. In Germany and Austria, issued volumes rose to record-highs, outsizing first-half issuance observed during the pandemic.
  • Record trading volumes continued in European (EU+UK) government bonds during Q2 2023, according to MarketAxess TraX. The traded amount in Q2 2023 was the highest average daily trading volume in European government bonds since records began in 2014, with trading volume increasing 3% (QoQ) and 15% (YoY).
  • Outstanding amount of European ESG government bonds reached EUR 406 bn during 2Q23. Volumes were driven by new green bonds issued by Germany (EUR 11.8 bn), Italy (EUR 10.0 bn) and Austria (EUR 3.0 bn) with additional tap issuance by the UK (EUR 7.0 bn), France (EUR 2.6 bn), Spain (EUR 1.4 bn) and the European Commission (EUR 1.7 bn). Austria issued an additional EUR 1.5 bn in green bills during 2Q23 and Cyprus became the sixteenth EU sovereign to enter ESG markets in April 2023, issuing an inaugural sustainable government bond (EUR 1.0 bn).
  • From April 2023 to October 2023, there were 3 exits and 3 entries of banks to European Primary Dealer systems, affecting sovereign debt markets in Slovenia, Italy, Ireland, and the European Primary Dealer Network (EU PDN).
  • During 1Q23 there were 2 long-term credit rating upgrades for European countries and 1 downgrade. This follows 2 upgrades and 1 downgrade in 1Q23, bringing the 2023 year-to-date total to 5 upgrades and 3 downgrades (there was 1 further upgrade and 1 downgrade in 3Q23 to date).
  • The average bid-cover ratio (demand/amount allocated) was 2.2 in 2Q23, an increase of 1.7% (QoQ) from 1Q23 and a decrease of 2.1% from 2Q22 (YoY).