The spread between BTPs and Bunds began to grow again on the morning of June 25th, reaching 74 basis points. Despite this negative data, however, yields continue to fall. The increase in the differential is only given by a faster reduction of the German ones compared to the Italian ones.
The first of the end-of-month auctions ended yesterday. Short Term Btp and Btp€i have achieved excellent success, with high demand for both products which has reduced their cost to the State. The Treasury raised 4.25 billion euros from this issue and today it will be the Bots’ turn.
Spreads increasing and yields decreasing, the trend of the week is confirmed
The opening on June 25th confirmed the trend in the spread and yields of Italian government bonds this week. The differential with German Bunds increased, reaching 74 basis points, but still remaining within the fluctuation range of the last few days.
Yields, however, fell sharply, going from 3.65% yesterday to 3.60% at the opening today. A significant decrease, especially during the period of BTP and BOT auctions, which ensures significant savings on the cost of debt for the State.
The increase in the spread is determined by the fact that the Bunds have recorded a slightly more marked decrease in yields. In fact, they went from 2.92% yesterday to 2.86% today, losing one hundredth of a point more than the BTPs and consequently widening the differential.
Yields also fall in Europe, spreads stable
Just like Italy, France has also failed to keep up with the decline in German government bond yields. The Oat lost 5 hundredths of a percentage point, reaching 3.52%, with an increase in the spread to 66 basis points, compared to the 65 recorded yesterday.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 2.86% | – |
| Italian BTPs | 3.60% | 74 |
| French Oats | 3.52% | 66 |
| Spanish bonos | 3.33% | 47 |
Spain, on the other hand, is keeping pace, maintaining its spread at 47 basis points, causing Bono yields to drop to 3.33% despite the political crisis that the country’s government is going through.
From the BTP auctions 4.25 billion euros, today it is the turn of the BOTs
Yesterday, the auctions of government bonds relating to the issues of Short Term BTPs and BTP€i indexed to Eurozone inflation ended. The result was a collection of 4.25 billion euros, divided into:
- 2.5 billion euros in Short Term BTPs, with a gross yield of 2.74%;
- 1.75 billion euros in Btp€i, with a gross yield of 2.04%.
Both placements recorded a coverage ratio slightly above 1.50, the threshold that separates a positive auction from one with weak demand. Today it will instead be the Bots’ turn, while tomorrow 26 June the auctions will end with medium and long-term government bonds.
