DGB preview: DGB35 and the DGB52

Danish government bonds should outperform in a debt-driven risk-off environment, making DGB35 preferable to DGB52 at the upcoming auction.

• French bonds have underperformed sharply as concerns about debt sustainability increased, while Danish 10-year government bonds tightened 6–7 basis points versus DESTR over the past month.
• Danish covered bonds also widened less than other covered markets, despite continued daily issuance, indicating resilience during the current risk-off episode.
• The Danish Central Bank has issued DKK 56 billion of its DKK 65 billion 2026 target through October, leaving less than DKK 3 billion per auction needed across the four remaining auctions.
• Against German peers, Danish government bonds offer the most value around the 9–10-year maturity point, while DGB35 provides a 0.6–1.1 basis-point risk-adjusted pickup for hedged and funded investors.
• DGB52 was well received at the 2 September auction, attracting DKK 3.9 billion of bids for issuance just below DKK 2 billion, and its spread versus German DBR52 has remained broadly unchanged.

Takeaway: Nordea prefers DGB35 because it offers the strongest relative value, while remaining neutral on DGB52 but expecting solid demand at both auctions, supported by continued debt-market concerns.