According to the Financial Times, according to which for the first time since 2008 the yield of the Greek ten-year fell below the yield of the three-month BTP of equal maturity.
To put it in other words, Italy became more risky than Greece. The picture has already begun to take shape at the end of October, when the spread between the two countries has literally collapsed around 12 basis points (from 1,000 in 2016). Then, after whole days of discussions, the overtaking materialized. What is going on?
Government bonds: that happens with the Italian-Greek overtaking
Yesterday's session, Thursday 8 November, was particularly challenging for Italian government bonds, hit by a real one sales rain. The sell-off was so obvious as to push the ten-year rates to record double-digit percentage progressions.
The latest news on the trade war front that triggered the sentiment of greatest risk appetite was most likely triggered by the trend. The BTP yield it is reported more than 1.25%, a level never observed from the end of August to today.
On the same day, the Financial Times continued, the yield of the Greek bond it stood at 1.10% which clearly highlighted the dreaded overtaking: in short, on the government bond market, Italy has become more risky than Greece.
"The returns of both countries, shot up during the debt crisis, remain very low by historical standards, but the recovery of the Greek bond market was more spectacular,"
the newspaper thundered.
The latest available data, however, still show the overtaking Italy-Greece and show a yield of 1.27% for the BTP and a yield of 1.23% for the Hellenic.