But how beautiful it is to proceed against the tide on the boat driven by Mario Draghi. Even on Friday morning, like Thursday, the US and Eurozone bond markets recorded an increase in bond yields, expectations of a revival of inflation are pushing up the yields of long and very long-term bonds. Thus the curve of market rates becomes steeper: short-term money compressed by the action of the central banks, against long-term money on the (slight) rise due to inflation and, hopefully, a greater demand for funds by the economies.
But the higher yield of German Bunds helps in this situation to enhance the formidable reduction of the spread between the Italian titles and those of the others which is picking up speed little by little confidence grows on the markets on the birth of a government led by super Mario. The gap between Italian and German stocks has already narrowed by 15 basis points between Wednesday and Thursday and then continued this morning once the 100 level barrier had been knocked down. Now, after an increase of around 8 percentage points in less than a week, the distance from the Bund, a reference point for the entire Eurozone, is 97. Just an appetizer, of what could be when words are followed by deeds.
In fact, in this virtuous scenario, the Italian titles will soon approach the Spanish ones, that is the spread could be reduced to 70/80 points. The consequences? Andrea Delitala of Pictet writes: "In addition to the savings on interest already accrued throughout the global decline in yields which allows us to issue today at rates on average close to 0%, well below the average cost of our previous debt (about 2,5%), a further narrowing of the spread of about 50 basis points, is worth every year, a further savings quantifiable at about 1,5 billion euro”, given that in 2020 the issuance activity amounted to 500 billion . A first estimate of what an increase in trust motivated by an executive led by Draghi can mean even before the disbursement of the funds arriving from the Recovery which will allow other savings.
The emissions arriving from other countries (until 2027) will in fact make it possible to reduce the emissions of our home net of the hoped-for leap in quality generated by the reforms. In short, it can be said that the mere appearance of Mario Draghi on the horizon of Palazzo Chigi has generated an effect that can be estimated in the order of a few billion for public finance alone. But the figure, of course, rises and not a little if we broaden our gaze to the banking system, the most sensitive to changes in the spread: a drop of 100 basis points in the spread translates into an average increase in CET1 ratios of 15-20 basis points. It is no coincidence that the week marked by the office entrusted by the president Sergio Mattarella closes for the sector with a progress of 14% around, the best week since June after five consecutive upward sessions.
Not to mention more generally, the improvement of the conditions practiced at corporate issues in Italian companies. Conversely, a failure of Draghi's mission, according to Ubs, could lead to a rebound of up to 200 points. But in that case the political problems would go far beyond the spread.
