欧元债券：战略刚需下的机遇窗口.docxVIP

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Eurobonds

EurobondsAwindowofopportunityforastrategicnecessity

InSummary

StrategicautonomyhasbecomeEuropesnorthstarinanincreasinglyfragmentedworld,aimosttenyearsafterpresidentMacronsfirstsorbonnespeech.Butwhatwillittaketoachieveit?InourFutureofEuropeseriesoverthecomingweeks,wewillexaminethenecessaryreforms,instrumentsandinvestmentsfromtradepolicytoenergysecurityandtheroleoftheeurothatwillenableEuropetoaddressitscriticaldependenciesandvulnerabilities.Today,wewillexplorethequestionofEurobonds,whichhavereturnedtotheagendaasEuropesdefenseeffortscallforadditionalfinancingoptions.

?CapitalflowsareshiftingtoEuropeandEuropeandebtisemergingasatransitorysafeasset.Globalcapitalisincreasinglyflowingtowardeuro-denominateddebtasthesafe-assetstatusofUSTreasurieserodes.Backedbystructuralstrengths,amplebalance-sheetcapacityandsuperiorliquidityfirepower(EUR2trnexcessliquidityvsUSD300bn).TheeurohasarenewedopportunitytoexpanditsglobalroleamidrisingEuropeaninvestmentneedsanddemandforUSDalternatives.ThisrequiresscalingupsafecollateralbyatleastEUR1-3trnby2035.StrategicEurobondscoveringcommonfundingneedsindefense,climatechangeandinfrastructurearethebestsolution.EventuallyamoreflexibleinstrumentEU-JumboscouldreduceinstitutionalandpoliticalfrictionsinanEUthatadvancesattwospeeds.

?Europesproblemisdebtsupply,notdemand:thebenefitsofaconvenienceyield.TheentireEUR8trnEuropeansafe-assetpooljustequalsthesizeofUSTreasuriesheldabroad.OurconvenienceyieldanalysisshowsthatEuropeleavessignificantuntappedpotentialinEurobondsissuance.Eurobondsandhigh-ratedsovereignbonds(esp.GermanBunds)arecomplementaryandnotincompetition.AtleastEUR1,000bninadditionalEurobondissuancewouldbenecessarybeforesubstituti