The spread between Italian BTPs and German Bunds remained essentially stable at 81 points at the start of April 27, starting the week in a reassuring manner. This is a trend common to that of other large European countries, with bond markets at a standstill awaiting developments from the talks between Iran and the United States for the reopening of the Strait of Hormuz.
Yields, however, fell, settling at 3.83% at the start of the session. A result also helped by the auction of Short Term BTPs on 24 April, which ended with high demand and above all with a drop in interest on government bonds of 8 basis points compared to last month.
Btp-Bund spread stable at 81 points
The last week of April opened with substantial stability for the spread between the 10-year Italian benchmark BTPs and their German counterparts, the Bunds. The differential remained at 81 points, the same at which it started the day on Friday. A non-optimal level, around 20 points higher than at the beginning of the year, but which reflects an increasingly complex international situation.
The key factor determining the movements of government bonds on the bond markets remains the energy crisis caused by the closure of the Strait of Hormuz. Over the weekend, the US withdrew its delegation from the talks, with Trump blocking Kushner and Witkoff’s trip to Pakistan and Iran preferring to send its foreign minister to Moscow.
However, the Italian economic situation also weighs on the spread data. In recent weeks, first Istat and Eurostat, then the International Monetary Fund and finally the OECD have certified a slowdown in the growth of our country’s GDP and a higher deficit in 2025 compared to the 3% established by European parameters.
Spreads slightly decreasing in Spain and France
Spanish Bonos do slightly better than BTPs, managing to achieve a drop in yields of three hundredths of a point, a faster reduction than that of Bunds, which are stuck at two. The result is a decrease in the spread by one basis point, which brought Madrid government bonds to 46.
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 3.02% | – |
| Italian BTPs | 3.83% | 81 |
| French Oats | 3.68% | 65 |
| Spanish bonos | 3.48% | 46 |
The French spread also falls. The Oat are 65 basis points apart at the opening, compared to 66 at the opening on Friday, with yields falling by three decimal points.
The success of the Short Term BTP auction and the next issues
The Short Term BTP auction which ended on Friday 24 April was positive for the Treasury. All the 2.5 billion euros offered were placed, with a demand of around 4 billion and therefore a positive but not excellent coverage ratio of 1.63, which signals solid demand. The gross yield was 2.8%, with a decrease of 8 basis points compared to the auction of the same financial product on March 25th.
Today, however, the auctions of BOTs will be held, the short-term government bonds with which the Treasury finances the most immediate expenses.
The next auctions in April and May will be:
- the auction of medium and long-term BTPs on 29 April;
- the Bots auction on May 7th;
- the auction of medium and long-term BTPs will take place on 8 May.
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