Overview

• The Btp-Bund spread briefly fell to 99.7 basis points on May 14, the lowest level since September 2021, before closing at around 101 points.
• Italy’s 10-year government bond yield stands at approximately 3.68%, compared to 2.68% for German Bunds, maintaining a 100 basis point differential.
• The spread decline follows S&P’s April 11 upgrade of Italy’s credit rating to BBB+, citing fiscal stabilization and political stability.
• Prime Minister Giorgia Meloni’s claim that Italian bonds are safer than German Bunds sparked criticism, with opposition pointing to higher yields and lower credit ratings for Italy.
• Milan’s Ftse Mib index has surged to over 40,000 points, its highest since 2007, as investors await Moody’s May 23 credit review, which could further impact spreads.