DAVY VIEW

The NTMA’s auction of €1.25bn of Irish government bonds yesterday (March 9th) means that the bulk of their issuance for 2023 is now likely complete. Final issuance in 2023 will now almost certainly be at the lower end, or even below the National Treasury Management’s (NTMA) announced €7-11bn funding range. This reflects the better than expected €5bn exchequer surplus in 2022, with forecasts for 2023 likely to be upgraded and the NTMA’s €28.5bn of cash balances. Hence, Irish ten-year bond spreads narrowed yesterday, no doubt helped by expectations that remaining issuance in 2023 will be very limited.