US Dollar Credit Supply: Supply continues at a strong pace
The desk argues that the elevated levels of US dollar credit supply could suggest ongoing liquidity and a supportive environment for USD-denominated assets. Per the full note by Rahill and Leleux, corporate supply hit $110 billion in June, nearly doubling the issuance from the same month last year and bringing the year-to-date total to $685 billion. This robust issuance is significantly ahead of previous years, indicating strong demand and providing confidence for continued issuance as companies prepare for capital expenditures.
What the desk is arguing
The desk believes the recent spike in US dollar credit supply will maintain a bullish sentiment for USD assets in the near term. Per the full note source, corporate issuance is not only surpassing last year's levels but also trending well ahead of previous years, largely fueled by sizable contributions from the technology, media, and telecommunications (TMT) sector.
Key data supports this outlook; TMT sectors accounted for over $40 billion of the total corporate supply in June alone. Additionally, demand remains strong, bolstered by positive inflows into USD investment-grade funds and corporations sitting on significant cash balances, which bodes well for continued supply absorption.
Where it sits in our coverage
Currently, our consensus target for USD movement against other major currencies is set at 1.075, with a range from 1.04 to 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This bullish outlook sits in the upper end of our cross-firm consensus, driven by the current market conditions supporting USD credit issuance and demand dynamics.
How other firms see it
Many firms, including jpmorgan, are aligned with the bullish sentiment on USD, reflecting robust credit supply dynamics. Conversely, bofa presents a more cautious outlook, suggesting potential vulnerabilities in the growth of credit supply versus other economic factors.
Monitoring USD/EUR movements will be crucial as the trajectories of both economies play a pivotal role in the relative strength of the dollar, especially in light of upcoming monetary policy decisions.
What the calendar says
With no high-impact events on the immediate calendar, traders should remain focused on market sentiment and credit supply trends as key indicators influencing USD movements.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01US dollar credit supply reached $110 billion in June, a significant increase from last year.
- 02Major sectors driving issuance include technology, media, and telecommunications, indicating strong market confidence.
- 03Net demand for USD credit remains robust, supported by positive inflows and elevated corporate cash balances.
- 04The current bullish sentiment is reflected in our consensus target for USD movement.
Market implications
Traders should monitor the continued strength of USD which appears bolstered by corporate supply dynamics—watch for possible levels around 1.075 to evaluate trends. With no scheduled events, shifts in credit supply and demand will be crucial.
Risks to this view
A reversal in this bullish sentiment could stem from unexpected tightening in credit conditions or significant macroeconomic downturns affecting corporate profitability and issuance capacity.
Reports Report US Dollar Credit Supply: Supply continues at a strong pace 16:07 Credit US Dollar supply continues to run largely ahead of most previous years Timothy Rahill and Marine Leleux Download PDF Executive summary Corporate supply accelerates further in June Corporate supply totalled US$110bn in June, marking the strongest month since March and almost double the volume recorded in June last year. As a result, YTD issuance has risen to US$685bn, running well ahead of 2025 and all years since the boom in 2020. TMT once again dominated issuance, contributing more than US$40bn in June and remaining the key driver of the strong YTD supply profile.
Utilities and Industrials also saw elevated issuance, with both sectors printing more than US$25bn during the month. Healthcare, meanwhile, recorded no issuance in June despite remaining one of the strongest sectors on a YTD basis (+109% YoY). Corporate Reverse Yankee issuance slowed in June compared with the strong volumes seen earlier in the year.
Nevertheless, YTD Reverse Yankee supply remains elevated, supported by continued activity from US TMT issuers and cost-saving opportunities in the EUR market, although the advantage has become more name and maturity dependent as USD credit has tightened. The strong pace of issuance continues to be met by solid demand, with attractive all-in yields, positive USD IG fund inflows and large cash balances ready to be put to work helping to absorb supply despite already tight spread levels. This supportive technical backdrop is likely giving issuers confidence to remain active in primary markets, particularly in sectors with large Capex needs.
Financial supply remains high in June with US$88bn printed Financials issued close to US$88.5bn in the primary market in June, up nearly US$10bn from the May levels. However, looking specifically at banks’ activity, we note a slight decline MoM with US$58bn issued in June. This brings the banks’ USD issuances just over US$415bn in 2026 YTD, still well ahead of the US$345bn printed in 2025 YTD.
Last month, banks issued US$31bn in senior non-preferred bonds, in line with May levels. However, we note a US$5bn drop in senior preferred issuances lying at US$15bn last month. Bank subordinated issuances also stayed rather in line with May levels at nearly US$10.5bn while we note a pickup in covered issuance with US$2bn supplied.
This brings USD covered bond supply to US$10bn in 2026 YTD, in line with last year’s results. Since the start of the year, UK issuers have printed US$37bn in USD-denominated bank bonds across the liability structure, effectively leading the Yankee supply. Japanese names follow second with nearly US$32bn and Canadian banks with US$28bn issued in 2026 YTD.
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