Lo spread between BTPs and Bunds at the start of the week it exceeds the 100 basis points, on highest since June last in a movement that affected the returns of the entire international bond market. In a context of energy prices are rising sharply due to the disruption of supplies in the Strait of Hormuz, fears of a overheating inflation are increasingly becoming reality, alarming even the central banks which last week all had reviewed their prospects on official rates. Markets are now pricing in rate hikes everywhere, which inevitably translates into sales of government bonds with the corresponding soaring yields.
After that in weekend rhetoric between Washington and Tehran has intensified, the movement has been premature overnight on the Asian markets, where there was an increase in the yield of US Treasuries 10-year bonds at eight-month highs of 4,4150%, while the Japanese government bonds The 10-year yield rose six basis points to 2,32%, near its highest level since 1999. This trend continued on European markets this morning.
From Italian government bonds to Greek government bonds, yields are all rising in Europe, too. But the German Bund is prevailing.
Il yield of the ten-year BTP surpassed 4%, updating July 2024 levels, up 3,40% from Friday's close. The similar French Oat e Good Spanish The 10-year bond rose by 2,8% to 3,85% and by 2,27% to 3,65%, respectively. The 10-year Greek bond (GGB) moved its yield to 4,029 (+1,36%).
In comparison it is the 10-year Bund to prevail in Europe, historically used as a benchmark and a safer asset than others: this morning the yield on the 10-year bond rose above 3%, confirming the highs since 2011, up "only" just over 1%.
The best-selling Italian government bond is the BTP: here's why and the consequences.
So the Italian bond market results the best-selling in Europe this morning and the reasons can be traced back to a level of public accounts burdened by a debt/GDP 48 points higher than the EU average just on the eve of a new public finance program intended to certify the probable decline in already modest growth targets. "War is a demanding stress test for public finances," the Minister of Economy also said last week. Giancarlo Giorgetti, while the results achieved in recent months with the promotions of the rating agencies are being eroded in just a few days with the increase in the cost of debt. spread compared to the Bund It had taken six months to drop from 91 points at the beginning of September to 60 at the end of February. This morning it was up to 104 basis points.
The impact on public finances certainly not immediate. But to get an idea, just look at the calculations of theParliamentary Budget OfficeA 30-point differential is attributed to a value of approximately 17 billion in costs over five years, with effects increasing over time. Compared to the levels at the end of September, when the last agreement was defined, Public Finance Planning Document (Dpfp), BTPs have changed course and a revision of the interest expenseYes, at the expected update from the Cabinet in early April. The rise in yields, however, hasn't ended there. Further increases are certain to follow with the expected central bank rate hikes.
