For the second consecutive day the spread between BTPs and Bunds has fallen. The differential reached 78 at the opening on March 17, falling below 80, which in recent days has been exceeded at the worst peak moments. The decline in the spread is due to a more marked reduction in the yields of Italian bonds compared to that of German bonds.
The other European countries have also recovered part of the gap accumulated in recent weeks with Germany. However, international tensions and the conflict in Iran continue to weigh on the markets.
Btp-Bund spread, second consecutive decline
Important sign of continuity in the reduction of the spread between Italian BTPs and German Bunds. The differential narrowed for the second consecutive day at the opening, returning below the 80 point threshold. In the first minutes after the start of trading, the spread reached 78 points, bringing the 6-month trend significantly back to positive, from yesterday’s substantial break-even. The one-year one, however, is still negative: the differential today is 25% higher than in the same period in 2025.
Both the yields of Italian benchmark government bonds and those of their German counterparts fell at the opening. Interest on Bunds decreased from 2.97% to 2.94%, while those on BTPs went from 3.77% yesterday to 3.72% today. A decline that allowed the reduction of the differential, given that the trajectory of Italian securities was faster than that of German securities.
The recovery of France and Spain
Spain, meanwhile, managed to get back below 50, to the levels of early December. Bonos confirm themselves as the product that manages to most closely follow the yields of German securities, despite the volatility of the last period. However, the lows of February are still far away, when the differential between Madrid and Berlin had dropped to almost 30 basis points.
| Government bonds | Returns | Spreads |
| German Bunds | 2.94% | – |
| Italian BTPs | 3.72% | 81 |
| French Oats | 3.62% | 66 |
| Spanish bonos | 3.43% | 49 |
Positive results also for France, which manages to resume a downward trajectory compared to the Bunds, bringing the differential to 66 basis points. An important fact especially after the victories of the most extreme parties on the French political spectrum in the recent local elections.
The next BTP and BOT auctions
For the Treasury, the decline in the spread is functional as the next auctions approach, which will concern BTPs, both short and medium and long term, and BOTs. The results of the latest issues, both the regular ones and those of the BTP Valore, were very positive and took advantage of very low spread scores.
But now the perspectives are changing. The increase in oil prices could soon push the ECB to increase interest rates, a move that would make the new public debt issued by Italy more expensive. The next auctions could be the last to have these returns. The dates to note are:
- on March 25th for the Btp Short – Btp€i auction;
- March 26 for the Bots auction;
- March 27 for the auction of medium-long term BTPs;
- on April 9th for the Bot auction;
- on April 10th for the auction of medium-long term BTPs.
