In the first minutes after the opening of the financial markets, the spread between BTPs and Bunds rose to 72 basis points, after having remained below the 70 point threshold throughout yesterday. It is the result of a net increase in Italian government bond yields, which reached 3.60%.
The first regular auctions of the month will also begin today, March 11, after the extraordinary issue of the Valore BTPs. We start with the 12 month Bots, with the additional placement ending tomorrow, 12 March. The Treasury auctioned 8 billion in government bonds for this issue.
The spread starts to grow again
The yields of the benchmark 10-year BTP increased at the opening of March 11th by almost a tenth of a point, compared to the early morning hours of the previous day. A sudden acceleration, after Italian government bonds had managed to reduce the differential with German ones throughout yesterday, even falling to 68.9.
A leap following pessimistic assessments on the possibility of our country emerging from the infringement procedure for excessive deficit, due to a possible slowdown in the economy due to the increase in energy prices. The war in Iran particularly damages Italy, which depends more than other European countries on gas for electricity production.
The increase in the spread was limited by the fact that German bond yields also increased. From 2.82% on the morning of March 10, they reached 2.87%, again due to fears of the impact of energy prices on the German economy, similar in vulnerability to the Italian one.
Spain and France hold up
The increases also affected the rest of Europe, but the other large EU countries managed to keep a pace more similar to that of Germany regarding the yields of their government bonds. For Spain, this meant limiting the spread of Bonos with Bunds to 45 basis points.
| Government bonds | Returns | Spreads |
| German Bunds | 2.85% | – |
| Italian BTPs | 3.60% | 72 |
| French Oats | 3.45% | 58 |
| Spanish bonos | 3.30% | 45 |
France does better, which also by virtue of less exposure to increases in energy prices, thanks to its extensive system of nuclear reactors, has maintained less pessimistic economic prospects. The Oats limited the growth of yields to two hundredths of a point and the spread with the Bunds narrowed to 58 basis points.
The March Bot Auction
March 11th is the day of the first regular auction of the month for Italian government bonds. We start with the 12-month Bots, with the deadline for submitting applications at auction set for 11:00. The additional placement will end tomorrow, at 3.30pm.
The State has made 8 billion euros available, with an additional amount of 10%. The return on these instruments is given entirely by the issue spread, therefore the difference between the nominal value and the price paid.
The other auctions in March will be held:
- the auction of medium-long term BTPs on 12 March;
- the auction of Btp Short – Btp€i on 25 March;
- the Bots auction on March 26;
- the auction of medium-long term BTPs will take place on 27 March.
