The spread between Italian BTPs and German Bunds began to grow again, reaching 120 points in the morning. The expectations of a normalization that arose over the past week were therefore disappointed. The weight of AI bonds is changing the market, also influencing government bonds.
The Treasury Bond is also always scary. 10-year US government bonds continue to remain above 5.3% yield, competing with the entire bond market and risking compromising the equity market as well.
The spread increased again to 120 basis points
After a few positive days, which had signaled a rapprochement between Italian BTPs and German Bunds, the spread began to grow again, reaching 120 basis points at the opening on 8 October 2026. A result that cancels out the progress made between the end of last week and the beginning of this one and which confirms the state of turmoil in the bond markets.
Yields and AI bonds
The first sign of this tension arrived early in the morning from Asian stock markets. In fact, there had already been an increase in sales on bonds from tech companies, issued to finance investments in AI and in the infrastructure necessary to make this technology work.
This led to an increase in the yields of these bonds, due to the drop in their prices, which Italian government bonds had to deal with. Hence the growth in the yields of the BTPs themselves, up to 4.70%.
European spreads still growing
Since this is a critical situation at an international level, the other main European countries are also feeling the impact of the bond market crisis. In Spain the Bonos achieved a yield of 4.17%, with a spread of 67 basis points.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.50% | – |
| Italian BTPs | 4.70% | 120 |
| French Oats | 4.91% | 141 |
| Spanish bonos | 4.17% | 67 |
France continues to reach new spread peaks, with OATs opening at 141 on October 8, with yields of 4.91%. Both countries are facing a complex political situation, which adds to the pressure on public debt.
Tomorrow the first October auction of Italian government bonds
The first auction of the month of Italian government bonds will be held tomorrow, Friday 9 October. These are Bots, short-term products without coupons, whose returns are determined entirely by the sale price. An annual Bot worth 8 billion euros will be offered, with an additional amount of up to 1.2 billion.
The subsequent auctions in October will be held:
- 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.
A new tranche of BTP Valore will also be issued between 19 and 23 October.
