SPREAD / The overtaking of Greece over Italy is only the beginning …


Eight days have gone by, of which only six were working and how much we wanted it not to be realized instead happened. Despite our sentimentality and the hope of being able to make mistakes, "the market and its always cynical epilogue" issued its (first) sentence: the differential between our ten-year domestic and the German one has risen to a higher value than the 160 basis points compared to area 140 we were referring to in the recent intervention. During the last few hours there are many observers who take up the spread theme above all in the light of the "overtaking" of Italy towards Greece. Well yes, this has happened too and all in a few hours.

Greek securities are considered "safer" than Italian ones, although the rating of the two countries is very different and paradoxically to our advantage. But are we seeing a paradox? The answer, our bitter answer, is no. It is easy, very easy, to comment today on this unexpected truth, but, analyzing more closely the dynamics of multiple correlated factors, the elements that lead to this conclusion had already manifested themselves during the year and in so-called unsuspected times. We invite all of you to review some in-depth information on these pages the March article, the next in April is the most recent in October: just a few days ago. The "hundred points" and the coveted and feared "competition of Greek titles" have become bitter (and dear) reality.

It hadn't happened since the crisis of 2008. Taking away from Greece, it is significant to note that our beautiful country is second to the latter with a view to operational financial reliability (obviously considering only the value of the spread). this momentum it can be found not only on the traditional benchmark (ten-year bonds), but also on other maturities: the ones closest to 5 and 7 years and the most distant of 15 years. We are talking about "imperceptible" differences in real cents that at times could change to decimals.

From a strictly operational point of view, it is advisable to report the increase in efficiency that occurred during these last days: at the end of October, the ten-year Italian registered a YTM equal to + 1.079% while today we have seen share + 1.31%. An increase of more than 20 basis points in a few sessions that, if compared to the 27 reported in the last two months (from the September lows to the highest last October) should make us think.

The bitter (and dear) reality – we still want to repeat it – has in fact penalized our pockets: those of the saver who suffered a decline of just under five percentage points on the government security held in the portfolio (ref. Futures Btp trend from September to today) and – obviously – the Italian State's funds in terms of interest payments.

"Taking into account the set of data emerging from the market and what might emerge in a political key – from a medium-term perspective – we can advance the following scenario: quotations down for our BTP and value of the upside spread. A bitter (and costly) conclusion if it finds evidence in the facts ". This was our conclusion a few days ago and this conviction – unfortunately – we are renewing in today's intervention.

At the end of the month the EU Commission will make its own judgment on our budget and the statements received so far from Brussels are anything but positive. The scenario appears worrying: the cynicism of the market on the one hand and the objectivity of the Commission on the other. We, our country, at the center of the dispute. It may not be a "beautiful year" nor the current one, nor the next one at the door.


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