How much is the next move of the new Prime Minister Matteo Renzi worth in terms of spread? According to Barclays, if it were in particular the reform of the electoral law, it could lead to a reduction of the differential between the ten-year BTP and the Bund by about forty points.
This was revealed by il sole 24 Ore, which explains that if in the short term the ECB and its expansive attitude guarantee overall the maintenance of the ten-year BTP yield in a fairly narrow range (3,60-3,80%), with a spread over Germany possibly down to 180 (and a gap from Spain of 10-15 basis points), in the long run it will obviously be crucial to complete the promised reforms, especially the electoral one because it would guarantee stability in the unfortunate event of early elections.
A success on this front would obviously be greeted favorably by the market and, according to an estimate by the British bank Barclays, would project Italian government bonds upwards to the point of making them outperform the Spanish ones and above all reducing the gap vis-à-vis Germany to 150 points. levels that have not been seen since May 2011. Also because the rating agencies could positively revise the opinion on our country, thus providing further impetus. Conversely, the absence of significant progress on the approval of the new electoral law and on the path of reforms would bring BTPs under fire until the spread on the Bund widened again to 200-210 basis points.
