The spread between Italian BTPs and German Bunds has returned to 88 basis points, the same level as last Friday’s opening. A large differential compared to the recent past, mainly due to the weight of instability in the Middle East, with the Houthis increasingly aggressive towards Saudi Arabia.
However, returns are in an even more precarious situation. In fact, they reached 4.39%, one of the highest levels ever in the last three years, one percentage point higher than the average between 2024 and the first part of 2026.
Spreads and returns are still unstable
The period of instability that has affected government bonds across Europe continues. The cause remains the situation in the Middle East and its consequences on the energy markets. The Houthi advance in southwestern Yemen has made the situation worse. The Iranian-backed group now has full control of the Bab-el-Mandeb Strait, one of the alternative routes to the Strait of Hormuz for Saudi oil.
The spread remains at 88 basis points
The spread is the first indicator of the consequences of this situation. The markets expect the increase in oil and fuel prices to limit the Italian economy, making our country’s debt situation worse and, consequently, its government bonds riskier. The differential, after hinting at a decline at the close on Friday, returned to 88 basis points at the opening on Monday 14 September.
Yields always at the highest since 2023
The mechanical reason for a spread 27 points higher than it was at the beginning of the year is yields. Compared to January 2026, a 10-year BTP, the security used to calculate the differential, yields one percentage point more. On the morning of September 14, yields reached 4.39%, levels similar to those seen during the 2022 energy crisis.
The spreads of other European countries
In the chaos, Spain remains one of the few European countries not to be affected by the crisis. A rapidly growing economy and a wide availability of energy from renewable sources keep investor confidence stable. The spread between Bonos and Bunds remains at 46 basis points, with yields still below 4%, albeit slightly.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.51% | – |
| Italian BTPs | 4.39% | 88 |
| French Oats | 4.49% | 95 |
| Spanish bonos | 3.97% | 46 |
On the contrary, France remains one of the countries most suffering at this stage. The revision of the GDP led to an estimate of the deficit for 2026 at 5%, with serious consequences for the Oat. The spread with Bunds increased to 95 basis points, driven by yields now close to 4.5%.
The next auctions of Italian government bonds
The first auctions of September government bonds ended last week. There were two issues, one of BOTs, with two different products, and one of medium and long-term BTPs with three securities. The next auctions will be held at the end of the month:
- the auction of Btp Short and Btp€i on 24 September;
- the Bots auction on September 25th;
- the auction of medium and long-term bonds will take place on 26 September.
