Spread at 100 and Piazza Affari at 40 thousand points (at the Maximants): what changes for government bonds and actions?

A brace in just 24 hours. On Tuesday 13 May, for the first time since October 2007 the index FTSE MIB The large capitalizations of Piazza Affari exceeded 40 thousand points, threshold that has maintained and consolidated up to about 40,300 points of the session on Wednesday 14 May. Values ​​that have not been seen since October 2007. And it is precisely on the morning of the 14 that, after months of slow down the spread, The performance differential between the BTP and the Bund at 10 years of age, has fallen under the psychological threshold of 100 basic points (99.75 points), i.e. a percentage point, as has not happened since September 2021 – at the time of the Draghi government. Let’s try to see – separately – what are the implications of these two goals and above all what are the future prospects of the fixed income markets and actions.

Fair spread but stable returns

The descent of the BTP-Bund spread below 100 for the moment has little effects on the investors’ wallets. In fact, the decline in the yield between the Italian ten -year and its German counterpart is accompanied by a tendential increase in the 10 -year bund performance today to a performance of about 2.68%. Italian titles, with an extra percentage point due to the risk of country a to the lower quality of the debt of Rome compared to that of Berlin travel on a performance of 3.68%. A value around which the Italian BTPs have been oscillating for several months, without prejudice to an exploit towards a performance of 4% in early April in conjunction with the bombastic announcements on the introduction of new duties by the White House and the presentation of the new investment plan in infrastructure and defense of the value of about a thousand billion euros by the German government. With « stable » returns around the threshold of 3.6-3.7%, the prices of Italian BTPs on the secondary market also undergo limited oscillations.

The effect of the promotion of S&P and the role of rating agencies

However, it is not the case to minimize the importance of the drop in the spread below 100 (the minimum of the day was 99.75 even if the value was slightly climbed at the end). The drop in the BTP Bund spread is above all the consequence of the decision of the S&P rating agency to bring the judgment to the Italian debt from triple B to triple B+. A promotion that took note of the perception of solidity of the management of public finances and stability (in slow improvement) of the debt/GDP ratio today around 135%. Next May 23 it will be up to the Moody’s agency to issue his judgment on Italian debt. If there is a new promotion, it is likely that the spread can go down again and in this case, together with the decrease in returns the BTP holders at 10 years (as on all the other deadlines) will record a capital gain. The Italian debt, moreover, remains very attractive in terms of returns: 3.68% of BTPs are in fact confronted with 3.35% of the French Oats, with 3.29% of Spanish Bonos and with 3.43% of Greek securities. In essence, the Italian debt offers higher returns in a scenario of stability of public finance. And this can only attract investors, including international ones.

Piazza Affari returns to the maximum of 2007

A somewhat different speech is valid for the performance of Piazza Affari. After the double -digit rise that was recorded in 2024, the Milanese price list had entered the sails explained in the new year with a growth of the prices of about 15%. Then, with the cold shower of the rhetoric of the « liberation day » linked to the introduction (or rather to the announcement) of the new duties uses the gain of a quarter has volarized over a few sessions while all the global price lists. Starting with those of the USA, they fell with Pedite between 15 and 20%. The rapid behind-French administration of the USA (the agreements with Great Britain and China, the availability to negotiate) have given confidence to the markets and removed the spectrum of a recession. So the FTSE MIB has recovered the earnings made until March to the point of reaching a new period of the period at 40 thousand points. Just today, in consideration of the roundabout of the threat of duties, the American business bank Goldman Sachs has raised its growth predictions on the euro area (from zero to +0.1% in the semester) while the increase in profits in the euro area in 2025 should place around 8%. All signs that, together with the unexpected news of a quarterly growth of the Italian GDP of 0.3% in the first quarter of 2025, hypothesize a possibility of further growth of the FTSE MIB, according to some analysts up to the area of ​​42,500 points.