Government Bond Data Report Q2 2021

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

Report highlights include:

European (EU+UK) bonds and bills issuance continue above pre-pandemic levels with EUR 893 bn issued throughout 2Q21. Issuance fell 3.7% (QoQ) and 33.6% (YoY), but quarterly volumes remain high by historical standards.
Outstanding amount of European ESG government bonds surpassed EUR 195.0 bn during 2Q21 during which EUR 27.5 bn of social bonds and EUR 9.3 bn of green bonds were issued. Volumes were driven primarily by the European Commission social bond issuance (EUR 27.5 bn), issuance of a new green German bund (EUR 6.0 bn), and additional issuance in the French and Belgian green bonds.
Outstanding volumes of European green government bonds reached EUR 103.5 bn in Q2 2021. Most recently, the inaugural GBP 10 bn UK green Gilt issued in September 2021 contributed to a further expansion in outstanding European green government bonds.
During Q2 2021, European quarterly traded volumes increased 1.6% (QoQ) and 5.1% (YoY), with average traded volumes at the highest level in a second quarter since 2014, according to MarketAxess.
Eurozone inflation expectations rise on the back of higher energy prices and general economic recovery. Eurozone 1Y market-implied inflation expectations reached 1.7% in September 2021, representing the highest level since 2013.
The average bid-cover ratio (demand/amount allocated) was 2.23 in 2Q21, a decrease of 2.2% (QoQ) from 1Q21 and a decrease of 1.9% from 2Q20 (YoY). In France, the average bid-cover ratio of auctions reached 3.1 during Q2 2021, the highest level in AFME records, which date back to Q1 2010. However, In Italy, the average bid-cover ratio decreased to 1.4, which is the lowest level in AFME records.
During 2Q21 there was 1 long-term credit rating upgrade for European countries and no downgrades (following 1 upgrade and no downgrades during 1Q21) bringing the full year total to 4 upgrades and no downgrades (there were 2 further upgrades in 3Q21 to date).