Spread at 132 points and inflation at 4.2%: a snapshot of Italian markets
The Btp-Bund spread hit 132 basis points in a week of global government bond sell-offs, while Italian inflation in September rose to 4.2%, driven by energy costs.
The spread between Btp and Bund touched 132 basis points before narrowing, with the Milan stock exchange nonetheless closing in positive territory. The movement comes amid a week marked by a global sell-off in government bonds, fueled by inflation and oil prices hovering around $100 a barrel. The US 10-year Treasury hit 5.34%, a level not seen since 2002, while the 10-year Btp reached 4.8%.
According to the sources consulted, what worries markets more than Italian debt is French debt: the Oat-Bund spread has returned to levels seen during the European debt crisis of 2012, after Piazza Affari lost 2.2% last Thursday.
On the price front, the Italian index for September rose to 4.2% from 3.3% in August, while the European harmonized index shows a more contained 4.1%. Prices are being pushed up mainly by energy costs: regulated energy prices rose 25.9% and non-regulated ones 22.2%. Inflation data so far comes from a single source, an analysis of Istat and Eurostat data cited in a market report; no independent confirmation is currently available.
| Indicator | Value |
|---|---|
| Btp-Bund spread (peak) | 132 basis points |
| US 10-year Treasury | 5.34% (highest since 2002) |
| 10-year Btp | 4.8% |
| Italy inflation (September) | 4.2% (up from 3.3% in August) |
| EU harmonized inflation | 4.1% |
| ECB deposit rate | 2.5% |
The European Central Bank has already raised rates twice, bringing the deposit rate to 2.5%, and expects inflation in the euro area to reach as high as 3.6%. Oil above $100 a barrel remains, in this context, the variable linking the trend in Italian energy prices to tensions in international bond markets.
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