Susanna Riva Yesterday morning in Rome, the sovereign bond market showed signs of volatility. Investors' interest focused on the yield spread between the 10-year BTP and the German Bund with the same maturity, a widely used indicator for assessing Italy's risk perception relative to Germany.
The 10-year BTP-Bund spread closed at 118 basis points.
At the opening of the session, the spread stood at 114 basis points, slightly higher than the 113 recorded the previous day. However, during trading, it gained another 4 points, closing at 118 basis points, compared to 117 basis points at the start of the day. This increase reflects a slight reduction in market confidence in Italian bonds compared to German ones.
Comparison with previous closures
The value of 118 basis points exceeds the 114 observed at yesterday's close and also exceeds the 113 of the previous day, signaling a tendency for the spread to widen in response to emerging economic factors.
Ten-year BTP yields evolving
The yield on the 10-year BTP fell from 4,49% at the opening to an intermediate level of 4,51% towards the end of the session.
Subsequently, following the release of French macroeconomic data, the yield jumped further, reaching 4,54%.
Impact of French data
French GDP and inflation data fueled upward pressure on yields, as investors recalibrated their expectations for European interest rates, shifting some capital into perceived safer securities.
European context: French OATs and expectations for third-quarter data
Meanwhile, 10-year French OATs returned close to the 5% threshold, closing at 4,96%. Their spread versus the Bund is now around 160 basis points, significantly wider than the Italian one.
Outlook for Italy, Germany and the Eurozone
The day also saw the release of third-quarter GDP data for Italy, Germany, and the eurozone as a whole. The release of these indicators is being closely watched, as it could further impact sovereign bond yields and spreads in the coming days.
The widening of the spread to 118 basis points and the rise in the yield to 4,54% highlight a more uncertain environment for Italian bonds. Market participants will closely monitor macroeconomic developments, as the ECB's monetary policy decisions and the economic performance of the major EU countries will influence the future direction of Italy's financing costs.