Rates on Italian government bonds hit new records and big speculators smell new investment opportunities.
After doubling returns on bots in six months today's auctions also confirmed the upward trend in rates on Italy's securities.
In detail, the yield on Btp to 3 years soared by 131 cents to 2,51%, the highest since September 2013, while that of the Btp to 7 years recorded an increase of 74 basis points, reaching 3,28%, the highest level since the first issue which took place in October five years ago.
The Treasury also placed the 14th tranche of the BTP at 15 years with a yield of 3,66%. Good question in all three cases. Lastly, the 28th tranche of the 30-year BTP was issued against requests for 1,06 billion, the amount issued was 558,3 million with a yield of 3,79%.
Today's results prove how volatility on Italian BTPs continues to rise. A trend has not gone unnoticed even in the eyes of large international speculators who are now seeing new investment opportunities.
In an interview given to Only 24 hours, JP Morgan Asset Management's fixed income chief Nick Gartside explained that the rate hike has led some of the company's funds to increase exposure to Italy. The reason is obvious: the higher the returns, the higher the profit. In fact, it is only the State that loses out, which risks having to pay out a lot more money when it expires.
"There is volatility on BTPs but if managed it can be an opportunity” stated Gartside on the pages of the business newspaper, also believing that the Italian political uncertainty “is adequately remunerated: for this reason some of our funds are increasing their exposure in BTPs”.
