The yield on the 10-year BTP fell below 2.9%, extending the decline from the over three-year high of 3.2% touched on May 8th amid a rally in government debt securities as traders digested unexpectedly high US inflation figures and reassessed the extent of rate hikes by the ECB amid an increasingly worse economic outlook in the currency bloc. Lower borrowing costs also narrowed the closely watched spread with the BTP’s German counterpart to under 1.9 points, pointing to lower concerns of Italian debt risk. While the magnitude of tighter policy is still unclear, ECB members continuously advocate for the start of the tightening cycle in July shortly after the end of the asset purchase program, with the latest signal coming from ECB President Lagarde. Italian inflation for April eased from its recent peak to 6.2% in April, while that in the Eurozone stands at a record-high of 7.5%.
Historically, the Italy Government Bond 10Y reached an all time high of 14.20 in October of 1992. Italy Government Bond 10Y - data, forecasts, historical chart - was last updated on May of 2022.
The Italy Government Bond 10Y is expected to trade at 3.04 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 3.66 in 12 months time.