Because on the spread the Financial Times celebrates Italy and not Germany
The spread between BTPs and Bunds continues to fall: the Financial Times newspaper highlights the positive news for Italy. Facts, numbers and comments
Spreads at 2-year lows, investors more optimistic about Italy than Germany.
The rally in Italian government bonds has narrowed the gap in borrowing costs versus Germany as investors are more optimistic about the Italian economy's prospects while the German economy has stalled.
This is what the Financial Times writes entitled "The spread on Italian bonds falls to its lowest level in two years as the economy does better than Germany".
THE SPREAD DROPS
The spread between BTPs and German Bunds drops to 123 basis points.
In the middle of the day it drops by a few fractions: on the online markets the spread moves around 123 basis points against a start at 126. Yesterday the spread had fallen to a minimum of 116, reaching the lowest levels since November 2021. The yield of the Treasury product is decreasing to 3.65%.
WHAT THE FINANCIAL TIMES WRITE ABOUT ITALY
The British newspaper highlights the return of the Spread to its lowest level since November 2021 (currently 123 points), a level that "few could imagine" three or four months ago, according to the Minister of Economy Giancarlo Giorgetti, according to whom the hope is continuation of this trend towards a spread of 110 basis points. Since last autumn – after the government indicated a return to the deficit/GDP below 3% only in 2026 – the Italian economy "has performed relatively well", writes the FT , "while the prospects for Italy have become darker."
The contraction of the spread, remember, is also linked to investors' interest in securities with good returns before the expected rate cut by the ECB.
“INVESTOR TRUST IN THE ITALIAN ECONOMY”
According to the British newspaper, “this marks a major turnaround from the level of more than 2 percentage points in October, reflecting growing market confidence in Prime Minister Giorgia Meloni's management of the economy, at a time when the growth in Germany has stalled .”
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-sullo-spread-il-financial-times-celebra-italia-e-non-la-germania/ on Fri, 15 Mar 2024 13:44:55 +0000.