The tension on Italian government bonds continues to decrease: the spread does not stop its downward run and this morning returns below the wall of 320 basis points, after having opened at 337. At the end of the morning, the yield differential between 10-year BTPs and the corresponding German Bunds stands at 319, the lowest level since September XNUMX to date. The interest rate on our ten-year bonds thus drops to 5,03%.
The positive trend of the spread has been going on for several weeks, but today's acceleration is linked to the new one maxi auction of loans held yesterday by the ECB, which has distributed almost 800 billion euros in total to around 530 European banks. These are three-year loans with a very low interest rate, just 1%. Under these conditions, the banks of countries such as Italy and Spain should use this new liquidity to invest in the government bonds of their own countries, speculating on the difference in yields and at the same time making a decisive contribution to the collapse of differentials. In fact, the spread of Spain also continues to decline (307 points this morning, from 317 at the opening), even if the gap with the Italian value is now significantly reduced.
“The unpredictability of the spreads is not negligible – the premier said yesterday Mario Monti -. But in the case of Italy we are seeing a stable, if gradual, reduction of the differential in recent weeks. I honestly don't see why that should change".
