Euro Credit Supply: Issuance surges in September
The recent surge in euro credit supply, particularly from the technology, media, and telecom (TMT) sectors, is a significant indicator of underlying market strength as corporate issuance reached €56bn in September, up from €25bn in August. This development, noted by Timothy Rahill and Marine Leleux, signals a broad reopening of the primary market with year-to-date issuance at €389bn, outpacing last year's figures by approximately 11% . Given that bank bond supply also surged with €57.5bn printed, a trend that reflects confidence in credit markets, the implications for the forex landscape, particularly EUR movements, are clear. The improving euro credit supply could bolster the euro as investors seek exposure to expanded corporate debt markets, pushing against previous conservative positions in the currency.
What the desk is arguing
The desk argues that the significant rise in euro credit supply will have a positive impact on the euro's exchange rate, potentially inviting upward pressure as investors flock to corporate bonds. Per the full note, the corporate primary market saw issuance more than doubling month-on-month, with notable contributions from TMT and a robust performance in bank bonds.
The bank bond segment’s remarkable performance, with a €20bn increase to €57.5bn, underscores a marked recovery in market sentiment. September's total issuance figures indicate growing corporate confidence, which is likely to elevate demand for the euro.
Where it sits in our coverage
In our coverage, we observe a consensus target for the EUR/USD at 1.075, ranging from 1.04 to 1.12. Specific firm targets reflect this bullish outlook: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
The desk's position aligns with the higher end of the consensus range, suggesting an optimistic stance toward euro appreciation alongside the recent issuance data.
How other firms see it
Aligned firms such as jpmorgan show confidence in euro appreciation driven by economic recovery, while bofa counters with a more conservative outlook on EUR weakness against USD. This divergence illustrates the mixed sentiments surrounding euro exposure in the near term.
The yields in euro-denominated bonds and the upcoming ECB meetings are additional touchpoints to monitor, as they could affect expectations surrounding the euro's trajectory going forward.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Euro credit supply rose to €56bn in September, demonstrating market recovery.
- 02Year-to-date issuance is 11% higher than last year, indicating strong corporate confidence.
- 03Bank bonds specifically saw a surge, reflecting positive sentiment in credit markets.
- 04The euro may experience upward pressure as demand for corporate debt grows.
Market implications
Traders should watch the euro around the 1.075 level, particularly following the trends in corporate bond issuance. An increase in bond yields or signs of confidence in the broader eurozone economy could fuel further appreciation in the euro.
Risks to this view
A reversal in this call could occur if global economic indicators turn negative, leading to a contraction in corporate financing needs or if central bank policies shift toward a more dovish stance. Additionally, unforeseen geopolitical risks could dampen market confidence, forcing a reassessment of the euro's strength.
Reports Report Euro Credit Supply: Issuance surges in September Published 15:43 Credit The corporate primary market opened up in September with TMT being the largest contributor. Bank bond supply surged in September Timothy Rahill and Marine Leleux Download PDF Executive summary Corporate primary market reopened in September Primary markets reopened in September, with euro corporate supply rising to €56bn from €25bn in August. YTD issuance reached €389bn, around 11% ahead of the same period last year and above the previous YTD high recorded in 2020.
Corporate net supply increased by €23bn during the month, bringing the YTD total to €152bn. TMT was the largest contributor to September corporate issuance with €15bn printed during the month, lifting YTD supply to €97bn, 31% ahead of last year. Utilities also remained an active source of issuance, with YTD volumes reaching €70bn, up 39% YoY, while both sectors continue to account for a significant share of overall corporate supply.
Corporate hybrid issuance totalled €6bn in September, bringing YTD volumes to €46bn. This has already exceeded the €38bn issued during the whole of 2025 and represents the highest annual volume on record for the asset class. Reverse Yankee issuance amounted to €12bn in September, lifting YTD volume to €89bn.
Issuance activity remains well above the level recorded over the same period in 2025, with September representing one of the stronger months of the year. Bank bond supply surged in September After a very decent month of August, the bank bond primary market really picked up in September with €57.5bn printed across the liability structure. That’s a €20bn month-on-month increase and brings last month’s supply to the highest level recorded since February (at €60bn).
The bulk of that supply stems from the covered bond segment with €24.5bn issued, which brings the covered bond YTD issuance just over the €170bn mark (including benchmark and sub-benchmark instruments). We expect the full-year covered supply to reach €190bn, of which €185bn in benchmark-sized bonds. Last month also saw a significant jump in senior unsecured bonds with nearly €26bn, up €13bn from August levels.
This is split with nearly €7bn in senior preferred bonds and about €19bn in senior bail-in instruments. This brings the YTD supply to over €66bn and €125bn, respectively. We expect supply to continue flowing in the segment this month to reach about €80bn in senior preferred bonds by the end of the year and €140bn in senior bail-in bonds.
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