take spread The Italian fell. A three-year lowwhile purchases of BTPs continue, leading to a decline in relative output. This is the effect of a country’s high creditworthiness recognition, approved by rating agencies’ decisions, in response to a combination of factors related to economic policy, the economy’s performance and inflation, and the ECB’s strategy. .
Extends at least from the “Dregi” era.
The spread reopened today. 117 pointsthe lowest level since 2021, settlement period Mario Draghi’s government. During this period, Italy’s credit, led by a former governor of the Bank of Italy and a former president of the ECB, was skyrocketing and the spread reached around 120 points, a level now punctured downwards. It’s done.
But the narrowing recorded in the spread between BTPs and German Bund yields is even more surprising if we Two other important periods: The installation of the Maloney regime and the first fully Giorgetti-style move. NoSeptember 2022After the center-right coalition and everyone winsGeorgia Maloney’s role as Premierhad spread to 250 pintsi, a level from which it is now halved, has lost about 52 percent. If you think about it. October 2023, The period in which the Maloney government was dealing with its first real meeting. trickery (that 2022 was almost due and dominated by the Treasury hoarded by the Draghi government), we note that the spread has narrowed by about 43%. 210 points of that time
At the same time, the performance of BTP fell to 3.36% And compares with 2.18% of the German Bund, 2.87% of the Spanish Bono and 2.90% of the French OAT. A return that recorded one. Progressive improvement And who testifies to it. More credibility Internationalization and rediscovery of our country pleasure of our government bonds.
But what factors produced this result?
Economy and Inflation
Data came in last weekInflation in the EurozoneConfirms a marked decline in price growth from 2.2% in August. 1.7 percent in September, The figure was also revised downwards from the initial 1.8 percent. Even B. C. E Confirmed this Inflation “well under way” And that inflation is now under control and on target to reach the 2% target directly during 2025 (not in the second half as previously expected).
Italian inflation is even lower. of the European one, established itself allo 0.7% Far from the Euro tower target, given growth that is not the worst in the bloc and remains close to 0.8 percent (less than the 1 percent expected by the MEF forecast model).
ECB strategy
Obviously, the impact of the reduction in inflation has already been felt. ECB Monetary Policy And it will increase further next year, when inflation is likely to return to the 2 percent target. The The deposit rate has been reduced to 3.25% (Repo A at 3.40%) and another 25 point cut is already expected in December. By next year, rates are expected to be around 2%, the threshold for neutrality, and so there could be four more 25 basis point cuts through 2025.
gave President Legarde, At last week’s press conference, he didn’t want to make promises, repeating a data-driven approach and meeting by appointment, but his words betrayed a certain point. Optimism About the dynamics of inflation, which is revealed in a A more subtle strategy of monetary policy.
Maneuvering and the New Stability Pact
The reputation of the country is also to be supported. “Wise and responsible” economic policy Repeated several times by Prime Minister Giorgia Meloni and Economy Minister Giancarlo Giorgetti, who have repeatedly confirmed that they Deficits and debt down Predicted by New Stability Pactallowing Italy to exit the excessive deficit mechanism in 2026.
This is why the government has come forward. “with very few resources” And with little margin of maneuver Budget Law One that doesn’t raise taxes and tries to support families and businesses and stay on track to simplify taxes. There is a trick Obviously the market appreciated, Pushing BTP spreads and yields downward ahead of the expected decision by rating agencies.
Promotion of rating agencies
The week ended with a great result.: Fitch Ratings Agency boosts Italy.One, improvement The outlook on the rating is “Positive”. From “stable” and confirming the BBB rating. Also for S&P, Italy’s credit rating is BBB with a stable outlook. Both agencies cited the government’s “reliable fiscal policy” and “stable political situation”.
S&P He even spoke “Pink” growth prospects For the beautiful country, forecasting average growth of 1% over the biennium 2024-2025, far from the “zero point” of the previous decade.
Fitch Instead, he emphasized that the improvement in outlook is positive. Improvement of financial framework and compliance with EU budget policies.
