Another increase in the spread between Italian BTPs and German Bunds due to the increase in Treasury bond yields. Increasingly uncertain news from the Middle East continues to destabilize bond markets, while Italy struggles to find an alternative to Qatari gas, blocked by Iranian attacks.
Yesterday the auction of Short Term BTPs and BTP€i took place, with a much higher demand than the offer of the Ministry of Economy and Finance. A figure that, however, did not prevent returns from reaching 2.9%, precisely because of the spread.
Spread still rising: yields at 3.91%
In the early hours of March 26, the spread between Italian BTPs and German Bunds began to grow again. At the close of the previous day, the differential had reached 88 points, falling below 90. The opening, however, brought the figure back to 91, due to a peak in the yields of 10-year benchmark BTPs, which marked a return for investors of 3.91%.
Bunds, meanwhile, remained relatively stable, with yields at exactly 3.00%. Italy continues to be more unstable than Germany due to the war, but also to the political turbulence that Giorgia Meloni’s government is going through, from which the undersecretary and the head of cabinet of the Ministry of Justice and, just yesterday, the Minister of Tourism Daniela Santantchè resigned.
This is all happening while Giorgia Meloni is traveling to Algeria, precisely to stem the energy crisis that is destabilizing the spread. The Government would like an increase in supplies, but Algiers has only proposed agreements based on immediate purchases on the spot market, which are very expensive.
Stable situation in Europe
Unlike Italy, Spain has maintained a stable spread against Germany for about a week. Even on the morning of March 26, the Bonos remained around a 53 basis point spread, with yields of 3.53%.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.00% | – |
| Italian BTPs | 3.91% | 91 |
| French Oats | 3.71% | 71 |
| Spanish bonos | 3.53% | 53 |
Similarly, France maintained the same spread as yesterday, 71 basis points, with yields of 3.71%. Oat returned to stability in 2026 after a very complex 2025.
Yields rising for BTPs: the BOT auction today
Yesterday the auction for Short Term BTPs and BTP€i took place. The results have been positive, but total returns are rising sharply. The Short Term BTPs recorded a yield of 2.89%, with a demand higher than the maximum offer, 3.5 billion, but still half a billion lower than that of the last issue of these instruments.
The 6-month BOT auction will be held today. The amount offered will be 7.5 billion euros and an additional amount of up to 1.125 billion. The next auctions, however, will be held:
- the auction of medium-long term BTPs on March 27;
- the Bot auction on April 9th;
- the auction of medium-long term BTPs will take place on 10 April.
