Euro governments raise record 73 bln euros from Jan debt sales
Demand exceeds funding by record 10 times
Scale of demand a surprise Belgian debt agency chief

AMSTERDAM, Jan 31 Reuters Euro zone governments sold a record amount of bonds directly to investors in January, seeing the highest demand ever, as hopes grow for interest rate cuts to support a weakening economy.

This is in stark contrast to worries around high government funding needs in 2023, especially in the United States, which sparked a bond rout and pushed borrowing costs to their highest in over a decade in October.

Euro area states raised a record 73 billion euros 79.1 billion from syndicated bond sales in January, LSEG IFR data to Jan. 30 shows. Syndications are closely watched to gauge demand as governments sell bonds directly to investors. At an auction, bonds are first sold to banks.

Around 725 billion euros of demand exceeded that funding by a record 10 times, Reuters calculations using data from debt management offices and IFR show.

Data on Tuesday showed the euro zone economy stagnated last year. Money markets have priced in a first European Central Bank rate cut in April, boosting sentiment towards bonds.

The scale of demand at government bond sales in January surpassed that seen during the COVID19 pandemic, when the ECB bought trillions of euros of debt to hold down borrowing costs.

It was certainly somewhat of a surprise given the fact that everyone was talking about the wall of supply…