Societe Generale said it expects eurozone sovereigns to issue 1.31 trillion euros in gross terms this year, slightly less than the 1.33 billion euros issued in 2024, mainly driven by lower supply from Italy and Germany, while France could issue more.

However, this total volume expected is bigger than the bank's initial forecasts. This is mainly because the gross issuance targets of Germany, Spain and Italy came in above SocGen's expectations, and it has edged up France's volume -- including buybacks).

Net supply after redemptions and quantitative tightening (QT) will be higher at 830 billion euros (mid-range) versus 713 billion euros in 2024, a new high, wrote the bank in a note to clients. This is explained by lower redemptions in 2025 and by the acceleration of QT.

On top of the 255 billion euros of QT under the PSPP program, this year will likely see around 180 billion euros of additional QT from PEPP.

The months with the highest QT volumes are likely to be March, April, July and October, pointed out SocGen.

Overall, France will likely remain the biggest issuer in net terms, followed by Italy and Germany.

The syndication season has started with deals from Belgium, Italy and Portugal, while Greece has mandated banks to prepare for a new 10-year GGB. The bank expects several other issuers to price new bonds in January. 10-year deals tend to account for the majority of January supply, alongside a few 30-year bonds, while February is all about long-end deals.