The last Monday of 2014 did not start well for the Italian bond market. At the start of the day, the 10-year BTP rate rose to 1,97%, from 1,944% at the close of 23 December, while the spread with the same maturity of the Bund reached 139 basis points, against the 135 on the day before Christmas.
Investor uncertainty is primarily linked to the expectation of vote for the election of the President of the Republic in Greece, decisive for the survival of the current Samaras government. If even the third attempt to elect the Head of State fails, early general elections will be held at the beginning of the year and Syriza, an alternative left-wing party led by Alexis Tsipras, who has already announced its intention to renegotiate the agreements with the Troika, will probably win them .
Furthermore, the first settlement auctions for the new year will be held today, with the Italian Treasury offering 7 billion semi-annual BOTs and 2-2,5 billion Ctz maturing in August 2016.
