(Finance) – Lo spread rose sharply today, while Expectations for monetary tightening are rising by the European Central Bank (ECB). Italian bonds are losing a lot of ground and doing worse than their counterparties, with the spread between BTPs and Bunds returning to levels not seen since May 2020. Also weighing on the trend of bonds globally was the US employment report in May, with a rigid labor market which, together with the high level of consumer prices, could support a hawkish attitude by the Federal Reserve
“The dynamics of the labor market in the US as a window on the state of the economy and on short-term inflation, the Russian slalom to the multiple commitments that could decree its default, the homogeneous sales of Eurozone government bonds with the consequent soaring yields and speculations on the dynamism of the reduction of the expansionary monetary policy Central Banks were the key themes of the week “, commented MTS specialists.
The yield of the Italian ten-year BTP closed the day up by more than 10 basis points with, a 3.41% from 3.30% of the previous close. The differential between yield of the Italian ten-year BTP and the German ten-year Bund ended the session at quota 213 basis points from 204 of the previous closing. During the session, the spread fluctuated between a low of 202 reached at 9.30 am and a high of 213 at 5.15 pm, before losing marginally until the close.
Eyes also on the next meeting of the ECBscheduled for next week, in which Hawks’ instances could emerge. Central bankers will find themselves making a decision on monetary normalization after record inflation at 8.1% in the eurozone, with markets switching to pricing at least a 50bp rate hike at one of the meetings from here. in October.