Euro Rates Watch – Third Dutch negative net bond supply year in a row

by: Kim Liu

  • The DSTA confirmed that its net bond supply will be negative for the third year in a row
  • While the total 2018 funding need is equal to that of 2017, it is very likely that the 2018 projection will be lowered (via reduction of t-bill issuance) as the new year progresses
  • Faced with lower funding needs, the DSTA tries to walk a thin balance in lengthening its bond portfolio and to preserve liquidity on its curve
  • The DSTA keeps its options open for 2018 long dated DSL issuance, but we expect that the bulk of this issuance will be concentrated in H2 of 2018
  • As the DSTA announced that it will issue a new 10y and reopen its 7y benchmark in Q1, these supply indications could create flattening pressure
  • The DSTA will no longer focus on unwinding longer dated receiver swaps under its risk framework
Euro-Rates-Watch-Third-Dutch-negative-net-bond-supply-in-a-row.pdf (219 KB)
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