The spread between BTPs and Bunds has fallen compared to last week, but yields have remained essentially stable at levels that are among the highest in recent years. This is despite Minister Giorgetti announcing that the Government is aiming for GDP growth of 1%, approximately one third higher than expectations.
However, the situation on the financial markets remains very uncertain, both due to international tensions and above all due to the behavior of the Federal Reserve. Failure to increase rates keeps Treasury Bond yields at their highest levels and European government bonds must compete by raising their coupons as well.
Because the spread falls but the returns do not
The spread between Italian BTPs and German Bunds has fallen to 82, after last week’s peaks. However, a result mainly due to the increase, albeit slight, in the yields of German securities. In fact, there was no drop in the Italian ones, which remained at 4.18%.
This is one of the highest figures in recent years, and the reasons are various, from the energy crisis to international tensions. Giorgetti’s words, who spoke of an increase in GDP of 1% in 2026, well beyond expectations, did not reassure the markets.
What does the Fed have to do with Italian yields
One of the reasons why yields show no signs of falling, neither in Italy nor in the rest of Europe, is the behavior of the Federal Reserve, the US central bank, and its president, Kevin Warsh.
In the USA, inflation is very high and this should push the Fed to raise interest rates, to slow down the economy and therefore also increase prices. However, the White House has been putting pressure on the Fed to lower interest rates for some time. Between these two pushes, Warsh remained steadfast.
The result of his policies, also aimed at decreasing purchases of government bonds, was a very marked increase in the yields of Treasury Bonds, US debt securities. Bunds, BTPs and all other European securities have to compete with the 4.8% that US ones yield to investors, and therefore coupons can only go up.
European spreads
This situation continues to be reflected in the spreads of the main European countries as well. In Spain, Bonos have yields of 3.80%, with a spread of 44 points.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.36% | – |
| Italian BTPs | 4.18% | 82 |
| French Oats | 4.22% | 86 |
| Spanish bonos | 3.80% | 44 |
In France the differential is painfully decreasing and has reached 86 points, with Oat yields of 4.22%.
The next auctions of government bonds
Between Wednesday and Thursday, investors will be able to take advantage of these yields with two auctions of Italian government bonds. For the first, that of Bots, the details of the securities that will be issued are already known:
- 7.5 billion euros in one-year BOTs, maturing on 14 September 2027;
- 1.5 billion euros in BOTs with 4 months of residual life, expiring on 14 January 2027.
The auction of medium and long-term bonds is scheduled for September 10th, the details of which will be announced today. The other dates to mark in the calendar for the auctions are:
- on 24 September for the auction of Btp Short and Btp€i;
- September 25th for the Bot auction;
- on 26 September for the auction of medium and long-term bonds.
