12/16

Morgan Stanley Analyzes Global Bond Issuance Trends Amid Varied Market Dynamics

Morgan Stanley's latest report highlights significant variations in global government bond issuance, with the U.S. leading the charge. The U.S. plans to re-open its 20-year Treasury for $13 billion and 5-year TIPS for $22 billion, against $5.1 billion in coupons and $62 billion in redemptions. This issuance is part of a broader strategy to manage a net DV01 of $25.4 million/bp for the week beginning December 16, 2024. In contrast, the Euro area anticipates zero net issuance, with €34 billion in supply against €10.9 billion in coupons and €15.3 billion in redemptions, resulting in a net issuance of €7.8 billion over the next five weeks. Japan's issuance strategy includes a 20-year JGB for ¥1 trillion, offset by ¥1.8 trillion in coupons and ¥17.1 trillion in redemptions, reflecting a net DV01 of -$8 million/bp. These issuance patterns underscore the diverse fiscal strategies employed by major economies to navigate current market conditions, as noted by Morgan Stanley's strategist Matthew Hornbach.