Euro Credit Supply: October slowdown
The desk interprets the recent slowdown in euro corporate issuance as a significant trend that may impact the overall credit landscape in the Eurozone. Per the full note from ing-think, euro corporate issuance sharply decreased to €28 billion in October from €56 billion in September, although year-to-date totals remain robust at €426 billion. With a marked decline in financial sector issuance, further developments may influence market appetite for riskier assets. Insights on credit supply could help shape currency pair dynamics going forward.
What the desk is arguing
The decline in Euro corporate issuance in October could signal a shift in market sentiment and liquidity conditions. Per the full note by ing-think, the drop to €28 billion from September's €56 billion indicates potential caution among issuers amidst economic uncertainties.
Notably, despite the October slowdown, year-to-date figures are strong, with €426 billion issued, suggesting sustained activity through the year. This underscores a dichotomy between short-term caution and long-term bullishness in corporate credit markets.
Where it sits in our coverage
The consensus target for EUR/USD sits at 1.075, with firms projecting a range from 1.04 to 1.12. Notable firms include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
The desk's assessment aligns closely with jpmorgan's upper end of the consensus. Thus, it highlights a more optimistic view compared to bofa, who hold a contrarian stance on the pair's trajectory.
How other firms see it
Firms aligned in their expectations of a moderate bullish view on EUR/USD include jpmorgan and citi, while bofa presents a more bearish perspective. Factors influencing these views include existing ECB policy and broader economic growth indicators.
Look for the EUR/USD trajectory to be influenced by the ECB's interest rate decisions and macroeconomic data releases, which remain critical to understanding credit and currency relationships in this environment.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Euro corporate issuance fell to €28 billion in October from €56 billion in September.
- 02Year-to-date issuance remains strong at €426 billion, impacting corporate credit trends.
- 03Negative net supply in the financial sector raises concerns over future liquidity.
- 04Cross-currency dynamics may reflect the shifts in credit issuance activity.
Market implications
Monitor EUR/USD, especially around the 1.075 consensus target, for potential positioning changes. The implications of corporate credit issuance on broader fiscal policy could catalyze fluctuations in this pair over the coming weeks.
Risks to this view
A marked shift in central bank policy or unexpected economic data could invalidate the current bullish stance. Should issuance trends not stabilize or worsen, expect market volatility to impact the EUR/USD outlook.
Reports Report Euro Credit Supply: October slowdown Published 14:40 Credit Translate Euro corporate issuance slowed sharply in October, but YTD supply remains historically strong at €426bn Timothy Rahill and Marine Leleux Download PDF Executive summary Corporate issuance slows in October, net supply remains positive Euro corporate issuance totalled €28bn in October, down from €56bn in September. Despite the softer monthly volume, YTD issuance reached €426bn, ahead of the €413bn YTD in 2020 and remaining above the €401bn issued over the same period in 2025. Corporate net supply remained positive at €2.2bn in October, bringing the YTD total to €154bn.
TMT remained the largest contributor to euro corporate issuance, with €8bn printed in October and €110bn issued year-to-date, up 30% versus last year. Utilities have also remained an active source of supply, with YTD issuance reaching €74bn (+28% YoY), while Industrials & Chemicals issuance totalled €59bn year-to-date. Corporate Reverse Yankee issuance amounted to €7bn in October, lifting YTD volume to €96bn.
This has already exceeded the €92bn issued during the whole of 2025, making 2026 the largest year on record for corporate Reverse Yankee issuance. Corporate ESG issuance reached €95bn year-to-date, exceeding the €76bn recorded over the same period in 2025. Green bonds continued to account for the majority of issuance, with YTD volumes reaching €87bn.
Bank bond supply drops in October with net supply in negative territory EUR financial supply totalled €17.5bn in October, down from the €49bn high recorded in September. This brings 2026 YTD gross issuance to €338bn and YTD net issuance to just below €111bn. October net supply was negative for the second time this year at nearly €-5bn, due to redemptions totalling around €22bn last month.
Covered bond issuances reached €8.5bn in October, a €16bn decline from September's level. This was the second-lowest monthly issuance volume recorded since the start of 2026, on a backdrop of spread widening at the beginning of the month. YTD covered bond supply is reaching €180bn, still nearly €30bn ahead of last year's level, despite last month's slowdown.
Bank senior unsecured issuance totalled just over €12bn in October, of which €8.4bn in senior non-preferred bonds and €3.8bn in senior preferred instruments. YTD senior unsecured supply stands at €214bn. While senior preferred bond supply is at a similar level to 2025 YTD, senior non-preferred bond issuance is running nearly €10bn above last year's level.
Sustainable bond supply slowed to €2.3bn in October, down over €7bn MoM. YTD ESG issuances have reached over €67bn, the highest level recorded since 2022. The increase was driven by green bonds (reaching €60.7bn versus €41.8bn in 2025 YTD).
Social bond supply declined to €4.5bn from €6.8bn the year prior. Sustainable issuances remain broadly stable at €2bn. Credit Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives.
The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download
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