Da Mo: It is expected that the issuance of German bonds will remain stable this year and will rise next year

On March 17, Morgan Stanley research rate strategists Lorenzo Testa and Maria Chiara Russo said in a report that the risk of German government bond supply in 2025 seems to be under control, while the issuance of government bonds in 2026 will surge. This, they said, should push up volatility in yields and asset swaps. Germany's future coalition partners and the Greens agreed on a planned fiscal package that paved the way for increased infrastructure investment and defense spending. The market's reaction to the fiscal plan was a massive sell-off in Eurozone bonds, especially German bonds, but strategists believe that most of the sell-off is over.