Italy-Germany 10-Year Bond Yield Spread Remains Within the Same Range Since the End of the Month

Luca Cazzulani from UniCredit Research stated that the 10-year Italian BTP-German Bund yield spread has remained within a bearish range since the end of last month, as investors focus on Italy's favorable short-term supply outlook. Cazzulani, the bank's head of strategy, noted, "Investors prefer to stay long on BTPs due to the likely supportive negative net supply (15-20 billion Euros) until the end of the year." He added that the U.S. elections have had very little effect on Italian government bonds so far, as "many details are still likely uncertain." According to Cazzulani, while BTPs remain stable against Bunds, they have become cheaper relative to swaps in line with market trends. The 10-year BTP-Bund yield spread stands at 125 basis points.