When the financial markets opened on 30 September, the spread between BTPs and Bunds reached 100 basis points, confirming the results of the previous day’s closing. The differential had not reached three figures on the Italian Stock Exchange platform since May 2025. At the same time, yields remained close to 4.60%.
The “Trump effect” is to blame for this spike, at least in part. As reported by Axios, it seems that the US president is actually intent on attacking Iran again after the mid-term elections, which will be held in just over a month. This has frightened the markets, which have already “priced in” a possible crisis in the Middle East.
The spread is back to 100 points
The spread confirmed the fears of the close on Monday 29th, reaching 100 basis points also at the opening of 30 September. A clear sign of pressure on the Italian public debt, just at the moment in which the Government is preparing to discuss the Financial Maneuver, with lower ambitions than expected due to the failure to exit early from the excessive deficit procedure.
Stable returns
Yields, however, remained stable following the auction of medium and long-term securities, where the 10-year BTPs that serve as the benchmark for the spread were issued. The shares remained just below 4.60%, still among the highest levels recently.
What does Trump have to do with the spread
Some observers have pointed out that part of this increase in the spread depends on the policies of the current US government. A “Trump effect”, due to the fact that, at the moment, the following are influencing yields above all:
- the price of oil;
- US Treasury Bond yields.
Just yesterday, the US newspaper Axios reported that negotiations between Iran and the US are at an impasse and that Trump would be frustrated by the situation. The US president would also have made it clear that he is ready to attack Iran again after the mid-term elections, which will be held in early November.
European spreads are under pressure
Demonstrating that the increase in the spread is due to external factors more than anything else, other European government bonds are also suffering. With the Bund yielding 3.59%, the Spanish Bonos stood at a spread of 52 basis points, one of the highest peaks in recent years.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.59% | – |
| Italian BTPs | 4.59% | 100 |
| French Oats | 4.79% | 120 |
| Spanish bonos | 4.11% | 52 |
The one that is most in crisis is France, which reached the opening spread of 120 points, with a yield now close to 4.80% for the Oat.
The October auctions of government bonds
The auctions of medium and long-term government bonds, the last of September, ended yesterday. The results were:
- a yield of 4.08% for the 5-year BTP with a coupon of 3.95%;
- a yield of 4.58% for the 10-year BTP with a 4% coupon;
- a yield of 3.38% for the CctEu maturing in 2036.
Regular auctions will resume from the second week of October. The dates to note are:
- Friday 9 October for the Bot auction;
- Tuesday 13 October for the auction of medium and long-term bonds;
- Tuesday 27 October for the auction of Short Term BTPs and BTP€i;
- Wednesday 28 October for the Bots auction;
- Thursday 29 October for the auction of medium and long-term bonds.
Finally, a new issue reserved for private investors of the BTP Valore will be held between 19 and 23 October.
