The spread between Italian BTPs and German Bunds also increased by one basis point at the opening of April 28, confirming the trajectory undertaken at the beginning of the week. Yields are also growing, reaching almost 3.90%, while the April auctions continue. Today the Bots meeting, the shortest-term government bonds, will be held.
Yields remain high largely due to the stalemate between the United States and Iran in peace talks. Tehran has proposed reopening the Strait of Hormuz if the US lifts the naval blockade of its ports, but Trump first of all wants the Islamic Republic to give up its nuclear program.
Spread between BTPs and Bunds slightly increasing
Also at the start of April 28, the spread between Italian BTPs and German Bunds increased by one basis point, exactly as happened yesterday. The spread between the government bonds of Rome and those of Berlin has continued to grow for more than ten days now. In fact, last April 17 it reached the recent minimum result, 72 basis points, corresponding to the brief reopening of the Strait of Hormuz by Iran.
The increase in the spread continues to be mainly due to the growth in BTP yields, which is confirmed to be faster than that of Bunds. Italian government bonds reached a yield of 3.88%, growing by five cents compared to four cents for Bunds, which instead stood at around 3.06%.
Spreads in France and Spain rebound
Spreads are also growing again in the rest of Europe. After a slight rapprochement yesterday, the spread between Spanish Bonos and the Bund began to widen again, returning to the 47 points at which it closed last week.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.06% | – |
| Italian BTPs | 3.88% | 82 |
| French Oats | 3.73% | 67 |
| Spanish bonos | 3.53% | 47 |
The French Oat took the same path, returning to a 67 basis point spread. Both countries, throughout the war, maintained less fluctuating trends in their respective government bonds than those of Italy, thanks to public finances or economies less exposed to the war in Iran.
The Bot auction is closing
The BOT auction will end today, which began yesterday with requests from specialists for the placement of short-term government bonds. There will be two different products up for auction. The first is quarterly, with ISIN code IT0005704454, expiring on 14 July and an amount offered of 2.5 billion euros. The second is semi-annual, with ISIN code IT0005702656, expiring on 30 September 2026 and an amount offered of 2 billion euros. They do not have a coupon: the return of the Bots depends entirely on the difference in price at the time of maturity compared to that of issuance.
Once this auction is concluded, only the medium-long term BTPs will remain, which will be placed tomorrow. The first auctions in May will be held:
- the Bots auction on May 7th;
- the auction of medium and long-term BTPs will take place on 8 May.
