The spread between BTPs and Bunds began to grow again to 117 basis points, with the yields on ten-year bonds reaching 4.52%. It’s a setback compared to the latest trends, which saw the spread declining from last week’s peaks. Oil also contributed to the increase in the spread, returning to 102 dollars a barrel.
The auction of medium and long-term government bonds, the last of October, ended yesterday. The gross yields of the products issued reached 4.49%, remaining below the average of those on the market.
Because the spread has started to grow again
There are various factors behind the new increase in the spread, which has started to grow again after a week in which the trend seemed downwards. One concerns above all the European Central Bank, which yesterday announced that it would keep interest rates stable. In the subsequent communication, however, the ECB also made it clear that, if inflation were to continue to grow, new interventions to increase the cost of money are not excluded.
This would inevitably also lead to an increase in interest on government bonds, as well as a slowdown in the economy which could penalize Italy. A situation also reflected in the yields of ten-year BTPs, which reached 4.52%.
Oil continues to have a negative impact
In the morning, the price of oil also did not help, as it started to grow again, reaching 102 dollars a barrel. This is despite 10 EU countries having announced a major release of crude oil and fuel reserves by January. Furthermore, to alleviate tensions on the oil market, some states have suspended the obligation for oil companies to restore depleted reserves in the short term.
The spread is also rising again in Europe
Even in the rest of Europe, spreads with German BTPs have started to grow again. Spain saw the Bonos go to a 63 basis point spread, while maintaining yields below 4%.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.35% | – |
| Italian BTPs | 4.52% | 117 |
| French Oats | 4.95% | 160 |
| Spanish bonos | 3.98% | 63 |
The country most in difficulty remains France. The OATs reached a spread of 160 basis points, although yields remained at 4.96%.
The next auctions of government bonds
The auctions of medium and long-term government bonds concluded yesterday. Yields reached 4.49% for 10-year BTPs, which therefore remained below the benchmark. The next auctions will be held at the beginning of November. The dates to note are:
- November 11th for the Bot auction;
- November 12 for the auction of medium and long-term bonds;
- November 25th for the auction of Short Term BTPs and BTP€i;
- November 26th for the second Bots auction;
- on November 27 for the second auction of medium and long-term bonds.
