The spread between Italian BTPs and German Bunds remained stable, dropping by just one number, to 72 basis points. A period of calm is confirmed, among the longest on the bond markets since the start of the war in the Middle East. Meanwhile, for almost a week, yields and spreads on European government bonds have remained stable, awaiting concrete developments.
As confirmed by the trend at the end of May, not even the promises of interest rate increases in June by the hawks of the ECB or the announcements by Iran and the USA on an approach to an agreement have moved the markets. Yet the latest inflation projections (initially estimated at 2.6%) will be revised upwards. This was confirmed by the president of the ECB, Christine Lagarde.
Stable spread between Italy and Germany
The first weekly opening of the financial markets sees the spread between Italian BTPs and German Bunds substantially stable. 72 basis points divide the government bonds of Rome from those of Berlin, with yields unchanged compared to recent days. Benchmark 10-year BTPs have an average coupon of 3.71% (+0.01%), while 10-year Bunds have an average coupon of 2.98% (+0.01%).
The new week opened with less than positive updates on the war in the Middle East, which not only continues to be without an agreement, but has also seen a resumption of cross-raids between the US and Iran.
An inevitable increase in interest rates is expected as early as June. The June 11 meeting could see interest rates rise by 25 basis points. A prediction that led Italy to move ahead with the announcement of the launch of the new BTP Italia Sì.
Stability also in the rest of Europe
France and Spain show slight movements:
| Government bonds | Returns | Spreads |
|---|---|---|
| German Bunds | 2.98% | – |
| Italian BTPs | 3.71% | 72 |
| French Oats | 3.59% | 61 |
| Spanish bonos | 3.40% | 41 |
Spanish Bonos reached yields of 3.40%, with a spread on German Bunds of 41 basis points. At the same time, the French Oat remained just below the threshold of 3.59%, with a spread of 61 points.
Btp Italia Yes, because it pays to invest
The Treasury will put the new BTP Italia Sì on the market. The issue is scheduled for June 15th and will continue until June 19th at 1pm. The minimum guaranteed fixed rate is not yet known, but it will be announced on 12 June.
It is a 5-year BTP, expiring in 2031 and payment will be semi-annual. As Gian Marco Salcioli explains on The Press:
Consensus analyzes indicate a minimum guaranteed fixed rate between 1.80 and 1.90%. To this value must then be added the Istat half-yearly inflation rate based on the Foi index, which offers the advantage that it includes the energy component which weighs the most at this stage.
Is it worth investing in this tool? The answer is given by Edoardo Proverbio, of Decalia Sim, who recalls how Btp Italia Sì will have a higher yield in the event of higher inflation.
