On the morning of April 7, the spread between Italian BTPs and German Bunds reached 88 basis points, remaining at levels similar to those of the Easter closing. Uncertainty is high, with Italian bond yields close to 4% due to the war in Iran and the possible energy crisis.
While European governments prepare for possible rationing, “energy lockdowns” and schools in DAD to limit traffic and consumption and avoid surges in costs, the Treasury must face the first auctions of the month of April, which will begin on Thursday 9 April and will concern medium and long-term BOTs and BTPs.
Btp-Bund spread at 88 points
Spread levels are essentially stable when European financial markets reopen after the Easter break. The spread between Italian BTPs and German Bunds started at 88 points at the opening on April 7, and then dropped slightly in the following minutes. However, the trend seems to be the same as the last days before Easter. The yields on BTPs are at 3.90%, while those on Bunds are just over 3%.
Not even the war in the Middle East, which is causing this situation on the bond markets, has changed. US President Donald Trump has imposed a further ultimatum on Iran to open the Strait of Hormuz, which must take place today. Attempts at mediation are reportedly underway but Tehran has reportedly rejected US conditions.
However, the markets are ready to see the situation degenerate. Trump has promised massive attacks on Iranian civilian infrastructure if the regime does not agree to reopen Hormuz. Power plants and bridges could be affected. European leaders have warned the US that it would be a war crime.
France and Spain maintain their gap
Spanish Bonos remained at the opening below 50 basis points of spread, at 49, with a yield of 3.51%. Also in this case the markets are awaiting developments, while Spain continues to be the country that most clearly opposes US and Israeli military operations in Iran.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.02% | – |
| Italian BTPs | 3.90% | 90 |
| French Oats | 3.71% | 70 |
| Spanish bonos | 3.51% | 49 |
The French Oat instead reached a spread of 70 basis points. Paris convinces the markets by leveraging its nuclear power plant system which guarantees greater independence from gas for the production of electricity.
The next auctions of Italian government bonds
The high yields of Italian government bonds are an opportunity for investors, who starting from April 9th will be able to participate in the first auctions of the month, called by the Treasury to place these financial instruments. The scheduled dates are:
- April 9th for the Bot auction;
- on April 10th for the auction of medium and long-term BTPs.
The other April auctions will then follow towards the end of the month:
- the auction of Btp Short and Btp€i on 24 April;
- a new Bots auction on April 28;
- on April 29th the last auction of the month, again of medium and long-term BTPs.
