The spread between Italian BTPs and German Bunds fell by 12 points at the start of April 1, 2026, reaching 83 basis points, compared to 95 yesterday. This is the effect of the words of Donald Trump, who promised that the US will withdraw from the Middle East within two or three weeks, removing the hypothesis of a land invasion of the country.
The prospect of a rapid end to the war in the Middle East and consequently of a return to normality in the oil markets has calmed the markets, with a very positive opening also for the European stock markets.
Btp-Bundi spread sharply down to 83 basis points
The bond markets reacted to Trump’s words very positively. German Bunds saw yields return below 3%, to 2.94%, while Italian BTPs moved away much more clearly from the 4% threshold, reaching 3.77% in the early morning hours of April 1st.
The result was a strong reduction in the spread between the two government bonds, which dropped to 83 points from 95 at the opening yesterday March 31st and from 91 at the closing. A reduction of 12 points in 24 hours which has brought the spread back under control and the balance of the last six months of spreads in the positive, which now show a drop of 2.29%.
Spreads and yields hadn’t been this low in two weeks. Bond market returns appear closely linked to the growth prospects of European countries, in turn determined by the stability of energy markets. In the morning the price of Brent fell below 100 dollars.
Spreads in Spain and France also fell
The spreads of the other large European countries have also reduced significantly, with significant drops in the yields of many government bonds. Spanish Bonos achieved a return for investors of 3.40%, with a spread compared to Bunds of 46 basis points, similar to that immediately before the crisis.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 2.94% | – |
| Italian BTPs | 3.77% | 83 |
| French Oats | 3.62% | 68 |
| Spanish bonos | 3.40% | 46 |
The French Oat also behaved similarly, with a drop of eight points in spread compared to yesterday’s opening, which brought the spread with Berlin to 68 basis points. Paris government bond yields settled around 3.62% in the early hours of the morning.
The next BTP auctions
The decline in the spread and a prospect of stability are excellent news for the Treasury, which is preparing for the first auctions in April. Although those at the end of March went well, in fact, the increase in yields due to international tensions caused an unexpected growth in spending linked to this part of the debt. The next auctions will be held:
- the Bots auction on April 9th;
- the auction of medium and long-term BTPs on 10 April;
- the auction of Btp Short and Btp€i on 24 April;
- a new Bots auction on April 28;
- on April 29th the last auction of the month, again of medium and long-term BTPs.
