Aggregate figures. For the Euro-9 sovereign issuers under our scope + EU NGEU, we expect YoY increases in gross issuance to EUR1.545bn (vs. EUR1.410bn in FY25) and net issuance to EUR625bn (vs. EUR609bn). The picture is mixed regarding the net recourse to bills. In 2026 the ECB’s QT will still have a meaningful impact (amounting to EUR420bn) and from the EU there will still be a relevant recourse to the market. Germany has the most pronounced increase vs. FY25 figures; Portugal, France and the Netherlands plan to marginally increase their net bond issuance, while other countries aim to reduce their net issuance.
How to seize this: market opportunities. i) Between February and May, France should be supported by c.EUR115bn of redemptions, allowing OATs to outperform other EGBs. ii) Starting in the autumn, we expect BTP-Bund spreads to tighten as markets price improved 2027 funding needs. iii) In 1Q26, supply pressure should hit Italian 15-20Y, while Spain focuses on 10-30Y; we prefer Spain 15-20Y and Italy 10-30Y in butterfly boxes. iv) In 2026, iotas should tighten as linker net issuance falls, while v) Italian CCTs may underperform BTPs.
Spain: Gross bond issuance of c.EUR177bn (c.EUR171bn in FY25), net bond issuance of c.EUR53.6bn (vs. c.EUR54.3bn) and net recourse to the market (considering the ECB) of EUR104bn (vs. c.EUR102bn). We expect c.20% of total gross bond issuance to be covered through four syndications: two new 10Y references, a new 30Y, a new 20Y or a tap of a linker.
Italy: Gross bond issuance of c.EUR360bn (c.EUR349bn in FY25), net bond issuance of c.EUR101bn (vs. c.EUR115bn) and net recourse to the market of EUR165bn (vs. c.EUR160bn). We expect five or six institutional syndications to collect EUR65-70bn, three retail-BTPs (EUR30bn) and >EUR5bn of PP.
Portugal: Gross bond issuance of c.EUR26.5bn (c.EUR21bn in FY25), net bond issuance of c.EUR15.1bn (vs. c.EUR7.9bn) and net recourse to the market of EUR22bn (vs. c.EUR15bn). We expect EUR10-12bn to be issued through three syndications, as the second deal of the year we expect a new 30Y benchmark.