Euro 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.
What the desk is arguing
The desk frames the current Euro credit supply landscape as a strong signal of corporate health, citing June's issuance figures. According to the report, June's €51bn issuance continues to reflect a sturdy economic backdrop, with year-to-date totals significantly outpacing last year's figures.
Particularly notable is the €18bn in ESG issuances, marking a new peak for 2023. This aligns with the ongoing trend of increased focus on sustainable finance, accounting for a record total of €64bn year-to-date, further solidifying the Euro credit market's potential within broader financial strategies.
Where it sits in our coverage
Our consensus target for EUR/USD is 1.075, with a range ceiling of 1.12 and a support level at 1.04. Key firms with specific targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view aligns with jpmorgan, sitting slightly above their projections, while contrasting with bofa's more cautious stance, which could influence market movement in the coming months.
How other firms see it
Firms like jpmorgan and others share an optimistic outlook on Euro credit, aligning with the positive sentiment emerging from the latest issuance data. Conversely, bofa takes a more conservative approach, leaning towards caution in their forecasts.
Key areas to monitor include the potential effect of rising ESG issuance on overall Euro stability and the dynamics between EUR/USD and broader risk sentiment in global markets, especially tied to corporate health indicators.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01June corporate issuance of €51bn shows resilience despite a decline from May's numbers.
- 02ESG bond issuance reached a monthly peak of €18bn, indicating a strong sustainable finance trend.
- 03Year-to-date totals for Euro credit issuance (€289bn) outpace 2022 figures significantly.
- 04Continued hybrid issuance suggests a developing preference for innovative financing structures.
Market implications
Traders should watch for EUR/USD movement particularly in response to upcoming issuance trends, as sustained high levels could bolster the Euro. A break above 1.075 may indicate strengthened investor confidence in Euro credit markets.
Risks to this view
A significant shift in the economic outlook, particularly arising from geopolitical tensions or shifts in central bank policy could invalidate this positive stance. Should issuance levels drop further or should investor sentiment sour on corporate debt, the Euro could face downward pressure.
Reports Report Euro Credit Supply: Supply continues at a strong pace 15:56 Credit Supply continues running with a heavy June Timothy Rahill and Marine Leleux Download PDF Executive summary June corporate supply remains strong Corporate supply was still very active in June, with €51bn issued over the month. While this marks a slowdown from the very heavy €68bn seen in May, it is still ahead of most previous Junes and brings YTD supply to €289bn, comfortably above the €259bn seen at this stage in 2025. Net supply also remained positive, with June adding roughly €17bn.
June supply was spread across sectors, led by Utilities and TMT. TMT issuance normalised after the very large €23bn printed in May, falling to €10bn in June, although the sector remains the largest contributor to YTD corporate supply at €76bn and continues to run well ahead of last year. Consumer and Healthcare remained quiet, with Healthcare still the clear laggard on a YTD basis (-55% YoY).
ESG issuance stood out in June reaching €18bn, the highest monthly print of the year so far bringing YTD levels to €64bn a record level since the highs of 2021. Corporate hybrids also picked up again in June after the slowdown seen in May, with another €4bn issued over the month. This takes YTD hybrid supply to €36bn, double last year’s level at this stage, and keeps hybrids as one of the clearest differences versus 2025 alongside Reverse Yankee and TMT supply.
Financials’ supply remains strong in June Banks remained very active in the primary market last month with €52bn printed across the liability structure, just a slight €2bn drop compared to May levels. Nearly half of that number stems from the covered bond segment with €23.5bn supplied (including benchmark and sub-benchmark instruments), making it the highest issuance level since February this year. Last month’s supply brings covered bond issuances to a little over €124bn on a YTD basis, still a comfortable €20bn ahead of 2025 YTD.
The senior unsecured supply also remained high in June, although noting a slight drop MoM with €24bn. This is split with just over €10bn in senior preferred instruments and another €13bn in senior bail-in bonds. While senior preferred issuances lie €7bn behind the 2025 level at €48bn, the drop is compensated by the senior bail-in supply, which is up €6bn at €93bn in 2026 YTD.
The subordinated segment is the only one in which we note a drop in supply over June, mainly stemming from AT1 instruments where only €1.1bn was printed last month. Another €4bn was issued in Tier 2 bonds. This brings the supply to just over €10bn and €20bn for AT1 and Tier 2 instruments respectively in the first half of 2026.
Euro Credit Supply Update 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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