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With a valued volume of around EUR 6 billion from 30 transactions, the market volume of the third quarter of 2024 was approximately 7% above the second quarter of 2024. So far, 2024 is behind 2023 at around EUR 1 billion (EUR 15.85 billion in 2024 vs. EUR 16.9 billion in 2023). The reason for this is the comparatively weak first quarter of 2024. The market continues to be very price-sensitive and demand-oriented with regard to issuers' issuance strategy. Investors act selectively, not least taking into account other alternative capital market products.
The 6 M EURIBOR has been steadily declining since the middle of the year. In the third quarter in particular, it fell even more sharply compared to MidSwap rates. The reasons for this development include falling inflation and the recent reduction in the main financing interest rate. A further interest rate cut of at least 0.25% is expected in the fourth quarter. Further key interest rate cuts are also expected in 2025.
Cash bond spreads have shown a stabilizing trend and low volatility over the course of the year so far. At the end of the third quarter, five-year investment-grade cash bonds remain at around 75 bps. Despite the upcoming US elections and the ongoing conflict in Ukraine, the capital market remains largely unaffected. Market participants expect risk premiums to remain at current levels. Geopolitical factors are currently showing no influence on the Schuldschein loan market.
Outlook for the 4th quarter of 2024
Market activity is expected to remain stable in the fourth quarter of 2024. The bond market volume for 2024 is expected to expire at around EUR 20 - 22 billion (5 to 15% below the previous year's level). Interest rate cuts could revive the Schuldschein loan market in 2025, while the US elections in autumn should leave it largely unaffected.
