In the first minutes after the bond markets opened on April 16, the spread between Italian BTPs and German Bunds remained essentially stable at 76 basis points. Yields also did not change particularly compared to yesterday, reflecting the stalemate situation in the Middle East, which the financial markets are experiencing with great anticipation.
In the meantime, the Ministry of Economy and Finance has announced a new dual tranche issue of 10 and 20 year BTPs and BTP€ia respectively. The consequence of this decision is the cancellation of the Btp€i auction scheduled for April 24th.
Spread stable at 76 points
For the first time since the beginning of the war in the Middle East, the spread between Italian BTPs and German Bunds seems to have found stability again. For the third consecutive day the spread remained well below the 80 point threshold, opening at 76 basis points on April 16th. Compared to recent days, among other things, this is a particularly balanced result.
In fact, it did not derive from a parallel movement in the yields of Italian and German securities, but from their substantial stability. The Bunds have in fact gone from 3.00% yesterday to 3.01 today, while the BTPs have increased slightly more, from 3.75% yesterday to 3.77% today. Minimal changes that reflect the uncertain performance of the stock markets yesterday.
A situation dictated mainly by the uncertainty of the war in the Middle East and the blockade of the Strait of Hormuz. All the parties involved, Iran and the USA, but also Lebanon and Israel, seem ready to dialogue, but the outcome of any talks, after the collapse of those last weekend, is completely uncertain.
Europe without shocks
Even in the rest of Europe the situation on the bond markets remained essentially stable. Both the Bonos and Oat spreads remained at the same level as yesterday, 44 and 63 basis points respectively, with yields rising slightly by one hundredth of a percentage point following the performance of the Bunds.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.00% | – |
| Italian BTPs | 3.75% | 75 |
| French Oats | 3.63% | 63 |
| Spanish bonos | 3.44% | 44 |
In these cases, however, it is not the first time since the beginning of the war that government bonds have found a moment of stability. Spain and France have demonstrated, at least as regards the spread, greater resistance to changes compared to Italy, above all due to the lower exposure of their economic systems to the energy crisis.
The April Btp€i issue was cancelled
Yesterday the Ministry of Economy and Finance announced that one less auction than expected will be held in April. In fact, the issue of Btp€i, the multi-year treasury bonds indexed to European inflation, which should have been held on 24 April, was cancelled.
The reason for this cancellation is the upcoming issue of two dual tranche benchmark BTPs, a 10-year BTP and a 20-year BTP€ia. The date of this issue has not yet been announced. The Ministry reserved the right to decide the most suitable period to introduce this new product on the market. The remaining auctions in April will be held:
- the BTP Short auction on 24 April;
- the Bots auction on April 28th;
- the auction of medium and long-term BTPs will take place on 29 April.
