The yield of the Btp rises but the markets see the slowdown on rates. Visco: “A break is not far off”

The yield on BTPs rises in today’s auctions but the rise is limited by yesterday’s data on US inflation which makes operators think that an end to the tightening of the Fed’s monetary policy is upon us. Meanwhile, all eyes are on the ECB from which indications will arrive in the afternoon with the publication of the minutes of the June board. Ignazio Visto, governor of Bank of Italy, said today that a pause in rate hikes is not far off.

Thus the yields of BTPs recorded an upward movement in today’s auction which was only marginal. The Treasury has allocated the maximum amount offered of 10 billion euros. In particular, Via XX Settembre assigned 4.5 billion of the new three-year period 15 September 2026, coupon 3.85%, with a yield of 3.71% – the same level as last March – to be compared with that of 3.46% of the placement of the previous month on the security of 15 April 2026.

Also assigned 3 billion in the reopening of the seven-year BTP at a gross rate of 3.9% – the highest since May – compared to 3.75% in mid-June.

The Treasury also placed 1.25 billion of the 15-year BTP at a rate of 4.37%, a record since October, up from 4.28% in February.

Lastly, €1.25 billion of 30-year off-the-run with a residual life of 26 years at a yield of 4.45% was assigned.

Meanwhile, on the secondary market, the reference ten-year BTP rate is hovering around 4.16%, at its lowest since 5 July and declining in the last two days, while the spread with Germany has narrowed by a few cents, around 168 points basis.

“At this stage, it seems that central banks are willing to stop and wait to analyze the results of the actions taken so far – comments Mark Nash, Head of Fixed Income Alternatives at Jupiter Am -. Their communication has been consistent in this regard, with the Fed, the Boe and the ECB all confirming that they have reached or approached their terminal rate, a level deemed tight enough to wait and see how inflation plays out. . More than anything else, they are concerned with assessing the market price of rate cuts and have had a lot of discussions about their “higher rates for longer” stance.

Meanwhile, eyes are focused on the indications that will arrive from the minutes of the June board – which will be released during the day – when Frankfurt increased the cost of money by 25 basis points, announcing other tightening to follow. If a new 25-point increase in July is taken for granted, uncertainty prevails over what will happen after the summer, although the board doves – Ignazio Visco again this morning – say that the tightening cycle is nearing its end. In this context, expectations on ECB terminal rates returned to just below 4% by the end of the year.