Markets did well to absorb the first wave of issuance in January, but our analysis suggests rates may have to rise further. In 2026, we face a record-high €930bn net supply of European government bonds. Government issuance accounts for around €550bn in 2026, whilst the European Central Bank’s Quantitative Tightening (QT) programme is expected to add another €380bn of supply for the market to absorb. We estimate the price-insensitive demand for government bonds to be around €700bn, which leaves €220bn to be absorbed by more price-sensitive buying. Banks will continue to be the biggest price-insensitive buyer in the ... (full story)