Europe's Debt Boom Raises Є1 Trillion, Surpassing Previous Record In 2024

Bridgette Randall
21 May, 2025
Frankfurt

Stock market indexes in Europe traded below the flatline as investors awaited an update on U.S. trade talks. 

Benchmark indexes in Frankfurt, Paris, Milan, and London headed lower following the worries about the stalled trade talks, rising government debts, and concerns about the upcoming earnings. 

Governments in Germany and Italy ramped up their bond offerings in May, and a total of one trillion euros of debt was raised by May 20, surpassing the previous 2024 record by nine days. 

The German government's bond offering was oversubscribed by 3.56 times, as the largest economy in the eurozone accelerated its infrastructure and defense spending.  

In the first four months of 2025, eurozone nations sold €600 billion of bonds, led by €156 billion in debt offerings by Italy. 

The brisk bond market offering came despite rising geopolitical uncertainties and the U.S. trade policy turbulence, and tighter yield spreads showed rising confidence among investors. 

The annual consumer price inflation in the UK accelerated to 3.5% in April, the highest since January 2024, from 2.6% in March, the Office for National Statistics reported Wednesday. 

The rise in inflation was driven by the rebound in energy prices after the government removed the price cap, tempered by a modest slowdown in housing rent to an annual pace of 6.2% from 7.2% in March. 

 

Europe Indexes and Yields

The DAX index decreased by 0.3% to 23,965.71, the CAC-40 index edged lower 0.4% to 7,910.18, and the FTSE 100 index declined 0.1% to 8,768.02.

The yield on 10-year German bonds inched higher to 2.62%, French bonds increased to 3.28%, UK gilts moved up to 4.74%, and Italian bonds edged higher to 3.62%.

The euro increased to $1.13; the British pound was higher at $1.34; and the U.S. dollar was lower and traded at 82.40 Swiss cents.

Brent crude increased $0.64 to $66.02 a barrel, and the Dutch TTF natural gas was higher by €0.45 to €37.45 per MWh.

 

Europe Movers 

JD Sports Fashion Plc declined 6.3% to 87.12 pence after the UK-based specialty retailer reported a decline in underlying revenue in the latest period. 

Infineon Technologies AG increased 1.4% to €34.37 after the Germany-based company collaborated with Nvidia to deliver a new power delivery architecture for AI data centers. 

Marks & Spencer Group plc decreased 1.5% to 361.90 pence after the company revealed that the recent cyberattack could negatively impact operating profit by £300 million. 

Julius Baer Gruppe AG dropped 5.4% to CHF 54.38 after the Switzerland-based bank and asset management company reported its second asset write-down in eighteen months. 

The company announced a write-down of CHF 130 million, or about $156 million, following a CHF 586 million write-down in its credit portfolio earlier last year. 

"While the review is ongoing, based on our findings to date, we do not expect to uncover additional material idiosyncratic risks that could lead to significant credit losses," said the recently appointed chief executive, Stefan Bollinger.