The first half of the year was an eventful and volatile one in the government bond market, and the second half threatens more uncertainty. Sovereign issuers are dealing with steeper curves as investors demand higher term premia. Meanwhile, deficit dynamics are shifting, especially as some countries face up to higher defence and infrastructure spending. GlobalCapital gathered senior funding officials from the EU, Greece, Ireland, Italy and Portugal in June in London to discuss how their funding plans had fared so far, how they are developing their investor bases and how they plan to tackle the uncertainties that lie ahead.
Social bonds have become an established part of the funding market for supranational, sovereign and agency borrowers, with a steady output of about €140bn a year from all kinds of issuer, since the exceptional surge during the pandemic.
The year is not yet at its halfway point but, already in 2025, global bond markets have had to face anxiety about European and US governments wanting to spend more, including on defence, and fears about the aggressive trade policy of the new US administration. During these testing times, however, new issue data demonstrate the resilience and flexibility of the primary market, writes Addison Gong
To secure their countries in uncertain times, governments around the globe are set to increase defence budgets to a size that has been rarely achieved in a generation. Strained public finances suddenly present an immediate barrier to the security of the public and key players in the capital markets are rushing to act, writes Elias Wilson
US Treasuries have long been the foundational asset underpinning the global financial system. But recent policy proposals from the White House have shaken this foundation, and what this means for capital markets participants seems perilously uncertain, writes Elias Wilson
As volatility continues to plague the US Treasury market, public sector issuers have found themselves at the centre of attention of investors seeking high quality, liquid assets as an alternative investment to US Treasuries. Market participants eagerly await further evidence in the coming months of any meaningful shift in investors’ behaviour. The early signs are certainly encouraging, writes Addison Gong
Addison Gong,June 16, 2025
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