The spread between Italian BTPs and German Bunds increased further at the opening on March 23rd. The spread reached 97 points, with 10-year Treasury bond yields averaging 4.02%. It is the effect of the instability caused by the war in the Middle East and the energy crisis that emerged from it, to which our country is particularly exposed.
In fact, the rest of Europe, although in difficulty, is less affected by this increase in financial market volatility. Furthermore, starting from Wednesday, the Treasury will begin to auction BTPs and BOTs in end-of-month issues, while yields risk being the highest of 2026.
Btp-Bund spread at 97, risk of return over 100 basis points
The increase in the spread recorded between the opening of Friday 20th and that of Monday 23rd by the Italian 10-year benchmark BTPs is 17 basis points. A peak that occurred largely on Friday, which however continued at the beginning of the week, with a further increase of five points. All the progress made in the last year by Italian government bonds to get closer to the yields of German ones has been nullified. Compared to last March, the spread dropped by only 8%.
The main reason why markets reacted so suddenly to the war in Iran, especially on our country’s debt securities, is Italy’s exposure to the energy crisis. Compared to other European countries, the Italian energy mix is much more dependent on gas. Any change in the price of this raw material therefore has a more significant impact on our economy. Even oil price increases are felt more: Italy is one of the European countries where electric mobility is least developed.
Spain and France hold up: because they suffer less than Italy
For these same reasons, Spanish and French government bonds are not reacting in the same way as Italian ones to this energy crisis. The Bonos of Madrid, despite rising in yields, maintained a spread of 56, only six points higher than the one recorded on Friday. The Sánchez government has announced a 5 billion plan to contain price increases, based on the exploitation of the country’s renewable network.
| Government bonds | Returns | Spreads |
| German Bunds | 3.06% | – |
| Italian BTPs | 4.02% | 97 |
| French Oats | 3.79% | 74 |
| Spanish bonos | 3.61% | 56 |
The French Oat, similarly, underwent an increase of seven points, ten less than the Italian ones. France, despite going through a turbulent moment from a political point of view due to the results of the local elections, can defend itself from the energy crisis thanks to its vast system of nuclear power plants.
The auctions at the end of March and the BTP yields
The peak in the spread pushed the yields on Italian government bonds above 4% just a few days before the auctions that will put short BTPs, BTP€i, BOTs and medium and long-term BTPs on the market. The dates are:
- the auction of Btp Short-Btp€i on 25 March;
- the Bots auction on March 26;
- the auction of medium-long term BTPs will take place on 27 March.
Such high coupons could represent an interesting opportunity for investors, but also a problem for the State, which would find itself paying more on public debt.
