The spread began to grow again after the recovery recorded last week. The spread between Italian BTPs and German Bunds increased, reaching 80 basis points. BTP yields stood at 3.98%, just below the psychological threshold of 4%, reached only on a few occasions in 2026.
The cause of this peak is once again the instability of international energy markets. Alarms on oil supplies are worrying the markets, while inflation is growing in Italy and throughout Europe and the Hormuz crisis seems far from a solution.
Spread again at 80 basis points, BTP and Bund yields
The opening on May 18 brought new pressure on the bond markets, especially on Italian BTPs. The 10-year benchmark government bonds, which are considered an indicator of the general situation of financial products issued by the Treasury, reached a yield of 3.98%, almost touching 4% in the first minutes of trading. Bunds also suffered a clear increase in yields, reaching 3.18%.
A distance of 80 basis points which has not been seen since the beginning of the month and which is the result of a series of factors, almost all deriving from the war in the Middle East and the closure of the Strait of Hormuz. Tensions between Iran and the US have escalated again and the possibility of a collapse of the ceasefire has increased. At the same time, a report from Swiss bank UBS found that international oil inventories are at a 10-year low.
Spain and France limit spread increases
Also at the beginning of this week, the particular exposure that the Italian economy and consequently the entire country system, including public debt, have to the energy crisis is confirmed. On the contrary, the other large European countries, with a more diversified energy mix, manage to limit the impact of the crisis on the spread.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.18% | – |
| Italian BTPs | 3.98% | 80 |
| French Oats | 3.84% | 66 |
| Spanish bonos | 3.62% | 44 |
The Spanish Bonos, in fact, recorded a spread of 44 basis points, not much different from that of Friday 15 May. Similarly, the French Oat also limited the growth of the spread with the German Bund, reaching 66 basis points.
The next auctions of government bonds
While signaling a certain pressure from the financial markets on Italian public debt, yields close to 4% on 10-year BTPs represent an opportunity for investors. However, the first auctions in May have already concluded, with a collection of over 17.5 billion euros for the State, at significantly lower yields of 4%.
The next auctions will be at the end of the month, more precisely:
- 26 May, Short Term BTP auction;
- May 27, Bot auction;
- May 28, auction of medium-long term BTPs.
