In the first minutes after the opening of the financial markets on 13 April 2026, the spread between Italian BTPs and German Bunds recorded a significant increase compared to last week’s closing. The differential returned above the threshold of 80 basis points, settling in the morning at around 81, with high yields for both the Rome and Berlin securities.
The reason for this reversal compared to last week’s declines is the instability of the truce between Iran and the USA in the Middle East. The peace talks collapsed and Trump announced the naval blockade of the Strait of Hormuz, to prevent Iran from exporting its oil to friendly countries and therefore continuing to finance the war.
The Hormuz blockade increases the spread between BTPs and Bunds
Instability in the Middle East immediately affected European bond markets. The spread between BTPs and Bunds returned above 80 basis points, reaching 81 in the first minutes of the opening. However, the yields on Italian government bonds above all increased, which went from 3.78% at the opening on Friday to 3.88%, gaining a tenth despite the positive auctions at the beginning of April.
Similarly, German government bonds also came under stress. Benchmark 10-year Bunds saw a significant increase in yields, from 3.01% to 3.07%. Berlin securities no longer seem capable of representing a safe haven asset in times of international crisis.
Both Germany and Italy find themselves in similar situations facing the energy crisis that could result from Trump’s decision to block the Strait of Hormuz and Iranian ports. Both economies of the two countries suffer from very low growth due to energy costs, which are too linked to gas.
France and Spain follow the Italian trend
Despite lower exposure to the energy crisis, Spanish Bonos also saw an increase in yields. The Spanish 10-year benchmark now yields 3.54%, with a spread of 46 basis points, which has increased at only a slightly slower pace than the Italian one.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.07% | – |
| Italian BTPs | 3.88% | 81 |
| French Oats | 3.72% | 65 |
| Spanish bonos | 3.54% | 46 |
Similarly, France went from a differential of 63 points to one of 65. The 10-year Oat now yields 3.72% and has returned above the threshold of 3.70%, below which it had fallen last week.
The results of the first BTP auctions in April
The first BTP issues of April concluded on Friday 10 April. The results were positive, with all three available products seeing higher demand than what the ministry offered.
| BTPs auctioned | Isin code | Expiration | Yield |
|---|---|---|---|
| 3 year BTP | IT0005689960 | March 15, 2029 | 2.91% |
| 7 year BTP | IT0005704868 | June 15, 2033 | 3.51% |
| BTP at 15 years | IT0005694630 | 01 October 2041 | 4.27% |
Throughout the state it has collected 8 billion euros through these tools. The next April auctions will be held:
- the auction of Btp Short and Btp€i on 24 April;
- the Bots auction on April 28th;
- the auction of medium and long-term BTPs will take place on 29 April.
