The spread between Italian BTPs and German Bunds returned to 72 points at the opening on June 18th after having dropped to 70 yesterday, marking a new record since the beginning of the war. This is a partially surprising fact, precisely because during the night Iran and the USA signed the memorandum of understanding that launches nuclear negotiations and puts an end to the war in the Middle East.
Yields also rose, with those of BTPs returning to 3.65%. A signal that goes against the trend also with the positive results of the auction of BTP Italia Yes, the government bonds reserved for private investors and indexed to inflation, which yesterday came close to 7 billion in total collections.
The spread did not react well to the Middle East agreement
The morning of June 18 was marked by the news of the signing, which took place remotely and during the night, of the memorandum of understanding between the USA and Iran which should put an end to the war in the Middle East. However, this news did not particularly reassure the markets, not even those of government bonds.
The spread between Italian BTPs and German Bunds increased to 72 basis points, after yesterday having reached the minimum since the start of the war, 70 points. BTP yields rose to 3.65% and Bund yields increased slightly to 2.93%. There is therefore still a lack of confidence in a rapid resolution of the conflict that would lead to greater security in the energy markets.
There are still many points in the balance:
- it is not certain that Israel will withdraw from Lebanon and stop attacking Hezbollah, as requested by Iran;
- Iran insists that, after the 60-day truce, it will impose a toll on Hormuz, which the US is against;
- there is still no agreement on Iranian uranium, in theory the cause of the war.
Spreads are increasing across Europe
This insecurity was not only felt in Italy. Even in the rest of Europe, government bond markets reacted with caution to the news of the signing of the memorandum, with a general worsening compared to yesterday’s optimism.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 2.93% | – |
| Italian BTPs | 3.65% | 72 |
| French Oats | 3.57% | 64 |
| Spanish bonos | 3.36% | 43 |
Spanish Bonos saw the spread with Bunds increase by one basis point, reaching 43, with yields growing to 3.36%. The French Oat instead reached a spread of 64 basis points, with yields of 3.57%.
Btp Italia Yes, collection close to 7 billion, the next auctions
The issuance of BTP Italia Sì continues and will end tomorrow. On 18 June the requests were 1.55 billion euros, with almost 50 thousand contracts. The total value came close to 7 billion euros, at 6.91 billion, more than the Italian BTPs maturing in June 2032 had raised, the last securities reserved for the retail market to be issued by the State before these.
Details of the first of the next regular government bond auctions, which will take place next week, will also be announced on June 19. The dates will be:
- Wednesday 24 June, the auction of Short Term BTPs and BTP€i;
- Thursday 25 June, the Bots auction;
- Friday 26 June, the medium-long term auction.
