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ITALY: BTPs Remain The Underperformer, Bank of Italy Releases Quarterly Bulletin

ITALY
CEEMEAEurozoneItalyBulletGlobalFixed Income BulletsRegionMarkets

Major 10-year EGB spreads to Bunds are off intraday wides, but remain wider today. BTPs continue to underperform, with the BTP/Bund spread now back above 130bps (+3bps today).

  • In its latest quarterly economic bulletin, the Bank of Italy revised its 2025 and 2026 (calendar-adjusted) Italian GDP growth projections a tenth higher (compared to the June vintage) to 1.0% Y/Y and 1.2% respectively.
  • The revisions were “largely owing to more favourable financial conditions and the Government’s planned expansionary measures”.
  • The 2024 calendar-adjusted GDP forecast was 0.6% Y/Y (unchanged vs June), and 0.8% on a non-calendar adjusted basis.
  • This is below the Ministry of Finance’s 1.0% (non-calendar adjusted) 2024 GDP forecast, which may already be out of reach according to Finance Minister Giorgetti following ISTAT’s Q2 revisions last week.
  • Meanwhile, the MNI Policy Team’s latest sources piece noted that the Italian government is still looking for ways to close a EUR6-8 billion financing gap before it presents its 2025 Draft Budget Plan to the European Commission by Oct 15.
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Major 10-year EGB spreads to Bunds are off intraday wides, but remain wider today. BTPs continue to underperform, with the BTP/Bund spread now back above 130bps (+3bps today).

  • In its latest quarterly economic bulletin, the Bank of Italy revised its 2025 and 2026 (calendar-adjusted) Italian GDP growth projections a tenth higher (compared to the June vintage) to 1.0% Y/Y and 1.2% respectively.
  • The revisions were “largely owing to more favourable financial conditions and the Government’s planned expansionary measures”.
  • The 2024 calendar-adjusted GDP forecast was 0.6% Y/Y (unchanged vs June), and 0.8% on a non-calendar adjusted basis.
  • This is below the Ministry of Finance’s 1.0% (non-calendar adjusted) 2024 GDP forecast, which may already be out of reach according to Finance Minister Giorgetti following ISTAT’s Q2 revisions last week.
  • Meanwhile, the MNI Policy Team’s latest sources piece noted that the Italian government is still looking for ways to close a EUR6-8 billion financing gap before it presents its 2025 Draft Budget Plan to the European Commission by Oct 15.