Euro Credit Supply: Primary markets reopen early
At a Glance
Lead — With an increase in euro corporate issuance in August signaling a robust liquidity environment, the primary markets are exhibiting resilience as they reopen earlier than anticipated. Per the full note from ing-think, corporate issuance climbed to €24bn in August, significantly surpassing July's €17bn, reflecting a shift that could influence forex dynamics in the region. This increase aligns with a strong year-to-date issuance of €332bn, presenting a backdrop that may lead to strategic positioning in euro pairs. Therefore, the operational environment in the euro zone may underpin a softer euro, especially if demand for European credits continues to shift considerably during this period.
Key Takeaways
- 01Corporate issuance in Euro credit markets rose to €24bn in August, indicating market confidence.
- 02Year-to-date issuance now totals €332bn, approximately 11% higher than last year.
- 03Strong performance in healthcare, utilities, and TMT sectors underpins this rise in issuance.
- 04Expect substantial supply continuation, especially from US technology issuers in the Euro market.
Full Analysis
What the desk is arguing
Corporate issuance in the euro credit market has begun to display a notable uptick, marking an early reopening of primary markets post-summer. In August alone, issuance reached €24bn, an increase from €17bn in July, as noted in ing-think's research commentary. This trend underscores a healthy demand for euro-denominated assets, which could potentially stabilize or strengthen the euro against its major counterparts.
The year-to-date figures are particularly striking, with cumulative issuance now at €332bn—approximately 11% greater than last year and just shy of the €337bn seen in 2020. Such figures suggest increasing confidence within the corporate sector, especially led by the healthcare sector, despite certain industries lagging behind their previous year’s performance. This robust activity might contribute to greater euro liquidity, which can have mixed implications for euro FX pairs.
Where it sits in our coverage
Our current consensus indicates a target price of 1.075 for EUR/USD, with a range between 1.04 and 1.12. Notable firms in our coverage include:
The desk’s stance positions at the upper end of consensus, aligning closely with jpmorgan while diverging from the more conservative outlook of bofa. This suggests additional upside potential in euro pricing as corporate credit demand strengthens.
How other firms see it
There appears to be alignment among firms anticipating euro growth due to increased issuance, particularly among jpmorgan and others projecting upward momentum. Conversely, bofa reflects a more cautious perspective that can create tension in market expectations.
Traders should also monitor the USD/EUR rates closely, as any shifts in U.S. monetary policy stemming from Fed actions can significantly influence the trajectory of euro credit dynamics. A dovish shift in Fed guidance could be particularly favorable for euro valuations in contrast to the dollar.
Market Implications
Traders should watch for any shifts towards greater euro liquidity that could influence the EUR/USD pair. Additionally, with robust supply patterns in the euro credit markets, there may be price adjustments if corporate credits remain attractive for investors, particularly in the wake of US policy changes.
From the original
Reports Report Euro Credit Supply: Primary markets reopen early Published 10:30 Credit An early reopening of primary markets after the summer slowdown helped lift corporate issuance to €24bn in August, up from €17bn in the previous month and £17bn in August 2025 T
Related speeches
4 itemsEuro Credit Supply: Supply continues at a strong pace
The desk interprets the strong demand for Euro credit supply as indicative of a resilient corporate sector, despite a slight decrease in issuance from May. Per the full note [source], June saw corporate issuance of €51bn, which, although lower than May's €68bn, is still well above historical averages and brings year-to-date totals to €289bn. This momentum suggests a robust backdrop for Euro denominated assets, particularly as ESG issuances remain a focal point and hybrid debt begins to gain traction. Current trading indicates a mix of stability and the potential for upward pressure on the Euro if these trends persist into the second half of the year.
Euro Credit Supply: Summer lull shapes corporates and banks’ July supply
The slowdown in Euro credit supply during July reflects the traditional summer lull, which manifested in a significant drop to €17 billion in issuance from €52 billion in June, highlighting sector disparities with utilities and TMT leading growth. Per the full note [source], while net supply remained steady with redemptions balancing new issues, tight spreads contributed to robust primary demand with year-to-date issuance at €308 billion, 11% ahead of last year. This environment could pose implications for EUR liquidity, especially if the momentum in corporate issuance does not accelerate post-summer.