6 billion placed at the BTP auction

Another increase in the spread between Italian BTPs and German Bunds. At the start of March 13th the differential recorded a growth of eight basis points compared to the early hours of yesterday, reaching 84, only two points less than the peak of Monday the 9th. Yields exceeded 3.80%, while interest on Bunds also came close to 3%.

The instability caused by the war in Iran, however, does not scare investors, who even in the BTP auction on March 12 continued to ask for more government bonds than the Treasury put on the market. Over 6 billion euros placed, with coupons between 2.4% and 3.25%.

Btp Bund spread at 84, uncertainty grows

Donald Trump’s words at the beginning of the week were not enough to reassure the financial markets. The lull in the increase in the spread has ended and the differential has returned to over 80 points. At the open on March 13, the spread reached 84 basis points, with a yield of 3.81%.

It is the effect of the war in the Middle East, which is dragging on at a lower intensity than in the early days. However, this does not prevent Iran from continuing to strike oil tankers attempting to pass through the Strait of Hormuz, which is effectively closed. The USA has already shown signs of tiredness regarding the conflict, while yesterday the first message from the new Supreme Leader Mojtaba Khamenei promised the expansion of the war fronts.

An instability also perceived by the German Bunds. Public spending to revive the economy has made Berlin’s government bonds less safe, which no longer tend to drop in yield in times of crisis. Interest on the 10-year benchmarks is now close to 3% and at the opening of March 13th it stood at 2.97%.

Yields rising across Europe

Spain revises the spread with Germany again at 50. Not even the Bonos are immune to the chaos caused by the war on the financial markets and the bond yields are now close to 3.50%.

France was also unstable and initially seemed to be able to take advantage of the instability to get closer to Germany. The spread between Oat and Bund approached 70 points, with French yields at 3.67%.

The results of the BTP auction

The auction of medium and long-term BTPs ended yesterday. Positive results for the Treasury, with demand consistently higher than supply. The three products offered were:

• three-year BTPs, with a coupon of 2.40%
• seven-year BTPs, with a coupon of 3.15%;
• fifteen-year BTPs (12 residual life), with a 3.25% coupon.

In total the Treasury has collected 6 billion euros, divided into:

• 2 billion euros in three-year BTPs;
• 2.5 billion euros in seven-year BTPs;
• 1.5 billion euros in fifteen-year BTPs.

The next auctions of Italian government bonds will be held between the end of March and the beginning of April, more precisely:

• the auction of Btp Short – Btp€i on 25 March;
• the Bots auction on March 26;
• the auction of medium-long term BTPs on March 27;
• the Bot auction on April 9th;
• the auction of medium-long term BTPs will take place on 10 April.