What is behind the continuous decline in the spread between the BTP and the Bund and behind the good performance of Piazza Affari even in the days of the government crisis? Above all, there is one certainty: the fact that the League's exit from the government takes away the nightmare of Italexit and the constant clash with Europe.
In the 20 days from the Lega yesterday's announcement of no confidence in the Conte government, the Btp-Bund spread fell from 203 basis points on 8 August - which, however, rose to 239 in the days immediately following - to 174 basis points yesterday, after a temporary foray even below 170 during the session.
The drop in the spread is the result of the drop in yields of the ten-year BTP which has collapsed below 1%, thus reaching the all-time low of government bonds which are the reference in comparison with those of Germany and beyond. This means that the Italian State will have to pay interest on the public debt that is much lower than expected, with the benefit of the budget maneuver which - also thanks to the good tax revenues due to electronic invoicing - may be less harsh than feared only by a few week ago. Of course, the wait for the new bazooka that the ECB promises to implement with Quantitative Easing also weighs on the reduction in rates, but the farewell to Italexit has undoubtedly played its part.
Equally virtuous was the trend of the FtseMib index of Piazza Affari, the most significant index of the Stock Exchange because it collects the 40 most important blue chips of the Milanese list: from 20.538 bp on 8 August it rose yesterday to 20.990, a step away from psychological threshold of 21 basis points, thus returning to the levels of May 2018. In twenty days, without the nightmare of leaving the euro, the Milan Stock Exchange essentially gained two percentage points. Investors thank you.
