Stable opening on October 20th for BTPs, which remained at yields and spreads very similar to those of yesterday. However, these are critical results, 111 points of differential and yields above 4.55%, which demonstrate a certain pressure from the financial markets towards government bonds.
The first day of the issuance of Btp Valore, the new government bonds intended for retail investors, ended yesterday. The Treasury collected 4.5 billion, thanks to very generous coupons that the State can afford due to the tendency of Italian private individuals not to sell their government bonds before maturity.
Spread stable, but yields remain high
Day of stability for the spread between Italian BTPs and German Bunds. The opening confirmed yesterday’s levels, with the differential remaining around 111 basis points throughout the day. However, yields are still quite high, at 4.55%, confirming that there is still a lot of pressure on government bonds.
Oil and gas keep yields high
In recent days, oil and gas prices have started to increase again. As for crude oil, the problem remains the Middle East. The tense situation in Hormuz and the increasingly frequent attacks by the Houthis against Saudi Arabia are shaking the markets and causing prices to rise.
As regards gas, however, the increase in prices is due to an increase in demand. Many European countries have fallen behind on supplies and are running for cover in the months before the winter period. Italy has filled its storage facilities to 88%, a good result but lower than in the past.
The increase in energy prices is one of the main causes of inflation, which in turn is one of the most observed metrics to determine the trend of interest rates and government bonds. This situation, therefore, prevents BTPs from returning to the yields of a few months ago.
Good start for Btp Valore
Yesterday the first part of the Valore BTP issue was held, dedicated to retail investors. The Treasury raised approximately 4.5 billion euros. There are two tools available:
- a Btp Valore with quarterly step-up coupons;
- a BTP Valore Insieme, with a single coupon at maturity.
The yields of these BTPs, which last 7 years, tend to be higher than the average of securities of similar duration on the market. The Treasury can afford this type of offer because, generally speaking, private individuals do not sell their government bonds except on rare occasions. Public debt owned by citizens therefore tends to be more stable. The issuance of Valore BTPs will continue until 23 October.
Auctions of regular government bonds will be held at the end of the month. The dates to note are:
- the auction of Short Term BTPs and BTP€i on Tuesday 27 October;
- the Bot auction on Wednesday 28 October;
- the auction of medium and long-term bonds will be held on Thursday 29 October.
