For BTPs, the opening of the financial markets on April 10th proved positive. The spread with German Bunds narrowed in the early hours of the day, reaching 77 basis points, despite the truce between Iran and the United States being increasingly fragile, due to tensions over how to reopen the Strait of Hormuz.
The BOT auction ended yesterday and the medium and long-term BTP auction begins today, which will offer various financial products to the market. Yields remain high compared to the recent past, but far from the peaks of the worst days of the conflict in the Middle East.
Spread stable at 77 basis points
In the first minutes after the opening of the financial markets, Italian 10-year benchmark BTPs limited the growth of yields to a slower pace than that of German Bunds. Italian government bonds used as a reference for comparison with other European countries settled at an average interest rate of 3.78%, only two hundredths of a point higher than yesterday’s opening.
In contrast, Bunds recorded a more significant change, increasing their yields by four cents and exceeding the 3% threshold again. This is where the spread reduction comes from. A result that confirms that German government bonds are no longer considered a safe haven for European and international capital during periods of strong instability and crisis, as happened in 2011.
Even Germany, due to a less brilliant economy than expected, an energy mix very dependent on fossil fuels and extraordinary public spending, implemented precisely to revive the economy, is losing, according to several analysts, the reputation that was linked to its government bonds.
Stability in European bond markets
A trend that can also be seen in comparison with other large European countries. Spanish Bonos recovered one point of spread at the opening on April 10, with yields at 3.46%.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.01% | – |
| Italian BTPs | 3.78% | 77 |
| French Oats | 3.65% | 63 |
| Spanish bonos | 3.46% | 44 |
Even more positive are the results of the French Oat, which greatly limited the increase in their yields, reaching 3.65%, and consequently reduced the spread to 63 basis points, a result comparable to that of the first days of war in the Middle East.
The results of the BOT auction and the issuance of BTPs
The auction of one-year and three-month BOTs ended yesterday, with positive results for the Ministry of Finance:
- the 12-month Bot (Isin IT0005704447) collected all 7.5 billion put on the market, with a yield of 2.6%;
- the 3-month Bot (Isin IT0005704454) collected all 2.5 billion put on the market, with a yield of 2.1%.
The auctions of medium and long-term BTPs will be held today. The products offered will be:
- A 3-year BTP, Isin code IT0005689960;
- A 7-year BTP, Isin code yet to be assigned;
- A 15-year BTP, Isin code IT0005694630.
The April auctions will conclude at the end of the month, with three more issues:
- the auction of Btp Short and Btp€i on 24 April;
- the Bots auction on April 28th;
- the auction of medium and long-term BTPs will take place on 29 April.
