Citi On German Supply Dynamics

Citi note that “the Finanzagentur will today release the Q4 issuance outlook for Germany, followed by a conference call.”

• “The last supply revision in June saw a €14bn reduction in supply (split €10bn in bills and €4bn in bonds) due to lower spending on energy support.”
• “There could be another downward revision in the German supply target today, especially in bubills, which under current plan are slated to see the highest quarterly gross and net supply over 2023.”
• “However, for bonds, we see limited scope of a large reduction judging by the current auction sizes for Bunds over Q4.”
• “This implies that Bunds are likely to continue to face the largest net cash requirement among EMU-11 over Q4.”