Euro benchmark supply eased through October after September’s surprise onslaught and the public pipeline is empty as of today (Monday), but market participants expect further modest supply in the new month, raising the prospect of 2021 staging a late comeback to beat 2020 volumes.

October issuance reached €13.8bn, which LBBW analysts noted stood well above the average level for the month – €8.75bn for the last five years – and was the highest since 2015. The figure is still well down on September, when issuance hit €20.8bn in euro benchmarks alone.

After three benchmarks totalling €2bn last week, plus a €250m tap, the euro market was quiet today, with public holidays for All Saints’ Day in many parts of Europe. No benchmark mandates have been announced for launch, but a syndicate banker said he expects a few issuers to look to prefund 2022 needs with trades in November.

“I think we will see more issuance,” he said, “not massive in any way compared to what we saw in September and October, but conditions are still very strong.”

Analysts echoed this.

“In terms of market dynamics, new issues have been pretty well absorbed,” said Joost Beaumont, senior fixed income strategist at ABN Amro. “New deals are also performing after re-offer, despite tight pricing, so conditions are OK, and I don’t foresee them changing.

“So it largely depends on whether issuers want to prefund already for the next year – in January there are a lot of redemptions, around €34bn. So it might be that issuers come already to the market to prevent a crowded market in January.”

LBBW analysts noted that, with banks emerging from black-outs in the Q3 reporting season, regular issuers could hit the market at short notice in the coming days and weeks.

November issuance has historically averaged around €9bn, according to ABN Amro’s Beaumont, and he said that would be a good guide for this year, given recent surprises to the upside and the market’s tendency to close in December.

Year-to-date issuance now stands at some €87bn and Joerg Homey, covered bond analyst at DZ Bank, said he expects full-year issuance to end up somewhere near the €90bn mark, which DZ had originally forecast for the year.

“The market is still open, so if somebody would like to come to the market, I think it should work,” he added, “but as is usual in November, it’s going to slow down considerably.”

LBBW analysts believe full-year issuance might exceed 2020’s €91bn – something one of their peers previously said would be a “heroic” outcome.

“The 2021 issue year did manage to catch up with 2020 shortly before it ends,” they said. “Considering how weak November 2020 was, we believe there is now a good chance that this level will at least be maintained and 2021 might even end up having a slightly higher issue volume than 2020.”

Analysts have already begun working on 2022 supply forecasts, due to be published over the course of this month, although December ECB pronouncements on TLTROs are poised to play a crucial role in determining what issuance in the new year will look like.