The spread between Italian BTPs and German Bunds reached 73 basis points, returning to grow slightly after days of stability. The new increase resulted from a drop in yields, with Berlin bonds coming close to 2.90% at the opening today, June 24, falling faster than Treasury bonds.
The first of the month-end auctions of government bonds will be held today, with Btp Short Terme Btp€ia available to investors. The coupons were established in recent days but the final yields will depend on demand.
Yields falling but spreads growing
The spread between Italian BTPs and German Bunds showed another minimal variation at the opening of June 24th. The differential has remained a few points above 70 for almost two weeks and, also in this case, this trend has been confirmed. 73 basis points of detachment, given by Italian yields falling slightly to 3.65% and a slightly faster decrease in German ones, to 2.91%.
This range of variation seems to be the new stability of the spread, about 10 points higher than what was recorded at the beginning of the war in Iran, when the BTPs had moved closer to the Bunds, leaving them only 60 points behind. On a historical level, these are always distances that are much lower than average and above all the worst peaks in periods of crisis.
This relative stability is due to various factors and is both the merit of Italy and the demerit of Germany. Our country, especially in the last legislature, has limited public spending, focusing on reducing the deficit. Political stability, with a single government for almost the entire duration of the legislature, has reassured investors. The crisis of the German economy has instead compromised the role of the Bund as a safe haven, which has not shown the classic influx of investments that other moments of international instability in the past had brought.
European spreads still stable
No particular movement, however, for the spreads of Spain and France. Both government bonds of the two countries continued, as in recent days, to closely follow the performance of the Bunds, with the result that their differentials remained completely unchanged.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 2.91% | – |
| Italian BTPs | 3.65% | 73 |
| French Oats | 3.57% | 65 |
| Spanish bonos | 3.38% | 47 |
The Spanish Bonos recorded a spread of 47 basis points, the new threshold for Madrid securities for days after the sudden peak that distanced them from the previous stability quota of 43 points, with yields of 3.38%. Similarly, the OATs recorded a decline to 3.56% yield, with a spread of 65 basis points.
Today the auction of Short Term Btp and Btp€i: the yields
The first of the month-end government bond auctions will be held today, that of the three-year Short Term BTPs and the 15-year BTP€ia. Regarding the annual coupons, the Mef communicated that:
- the 3-year BTPs, ISIN code IT0005692410, will have a coupon of 2.20%;
- the 15-year Btp€ia, Isin code IT0005547812, will have a coupon of 2.40%.
Auctions of Bots and medium and long-term securities will also be held in the next few days. The dates to note are:
- Thursday 25 June, Bot auction;
- Friday 26 June, medium-long term auction.
