Euro area government issuance update 4Q26: supply pace to ease materially

J.P. Morgan Global Markets Strategy quarterly update on euro area government bond issuance. 2026 gross bond issuance is forecast at a record €1.48tn versus €1.39tn in 2025, mainly driven by higher German issuance and larger redemptions; the risk of higher issuance from the Middle East conflict or an energy shock is low. Primary-market intensity is expected to ease materially in 4Q26, with the issuance pace averaging ~€80-100bn in October and November and ~€25bn in December; net issuance should decline sharply versus 3Q26, and 10Y+ supply should fall. Smaller euro area sovereigns have already covered 85% of their 2026 bond funding needs, and roughly 85% of the full-year gross issuance target was covered by January-September. Supply versus ECB QT dynamics turn relatively favourable in 4Q26, though overall 2026 pressure remains modestly higher than in 2025. Sovereigns continue to use a combination of bonds, T-bills, non-standard instruments (retail, EMTN) and external sources (NGEU, SAFE)