After the collapses and increases of the last few days, the spread between Italian BTPs and German Bunds has stabilised. The differential remained at 76 basis points, exactly like yesterday, while the yields of both securities increased, with the Italian ones reaching 3.70% and the German ones at 2.92%.
In Europe, the Spanish spread is stable after yesterday’s peak, while the French spread is growing significantly. Paris is heading towards a phase of instability before the April elections, with the electoral campaign stirred in the morning by the declarations of Christine Lagarde, president of the ECB with only a few months left in her mandate, who opened up to possible early resignation to “make a European voice heard” during the electoral period.
Spread stable but returns increasing
After a very unstable week on the bond markets, the spread between Italian BTPs and German Bunds showed signs of stabilisation. In just a few days the differential went from the lowest levels of the last three months to approaching levels seen only in the most critical moments of the war in the Middle East. However, it now seems to have stabilized around 76 points, slightly higher than it was before this brief phase of instability.
However, at the opening on 3 July there were other signs of movement on the markets. In particular, yields on Italian and German bonds increased. The 10-year benchmark BTPs recorded growth of three cents, reaching 3.70%. The Bunds followed the same trajectory, which instead exceeded the 2.90% mark again, at 2.92%.
European spreads in motion, Lagarde hints at entering politics
In the first minutes of the opening on July 3, the Spanish spread remained stable at 47 basis points after yesterday’s peak. The French one, however, increased significantly, going from 68 to 72 points, with yields of 3.65%, very similar to the Italian ones, after months in which the OATs had distanced themselves from the BTPs.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 2.92% | – |
| Italian BTPs | 3.68% | 76 |
| French Oats | 3.65% | 73 |
| Spanish bonos | 3.39% | 47 |
A movement that could be linked to an interview by ECB President Christine Lagarde, given to the French economic newspaper Les Echo. Lagarde, whose mandate expires in a few months, has opened up to early resignation if the electoral campaign for the French presidential elections, scheduled for April, needs a “European voice”.
July auctions starting next week
The auctions of government bonds will begin next week, after a very busy June thanks to the issue of Btp Italia Sì. They begin on July 9th with the first auctions, finishing in the last days of the month, until the 30th. The dates to note are:
- July 9th Bot auction;
- 10 July auction of medium and long-term bonds;
- 28 July auction of Short Term BTPs and BTP€i;
- July 29th Bot auction;
- July 30 auction of medium and long-term bonds.
