Overview
- The Treasury sold a €3 billion tranche of the BTP maturing 26 August 2027, drawing €4.669 billion in orders for a bid-to-cover of 1.56, with settlement on 28 August.
- The two-year BTP yield increased by 9 basis points from the prior auction to 2.20%, signaling slightly higher short-end funding costs.
- The 10-year BTP yield edged down to about 3.58%, leaving the Italy–Germany 10-year spread near 87 basis points, two basis points wider on the day.
- France’s 10-year OAT closed around 3.51%, compressing the Italy–France 10-year differential to roughly 9 basis points after an intraday low near 5.
- Goldman Sachs said the OAT–Bund spread could exceed 85 basis points if the French government loses a confidence vote, while keeping a year-end target of 70 basis points.