12 Jan 2023 Eurozone Monitor BTP Yields will Rise, but the Italian Yield Curve is Not About to Invert

• Italian bond yields offer an attractive carry, but yields are likely to stay high this year and next...
• ...Even if the spread to bunds falls, as we expect, assuming Italy doesn’t rock the boat with the EU.
• We expect BTP yields to rise to 4.35% by June, before easing back to 4.0% by year-end.

Melanie Debono (Senior Eurozone Economist)Eurozone

25 Nov 2022 Eurozone Monitor Italy's Meloni Avoids a Truss 2.0 Moment, Despite Higher Spend

The new budget in Italy means consumption growth will slow less than we previously thought in 2023. 

Financial markets welcomed the budget; we are revising down our call for the rise in the BTP yield. 

We look for the yield to rise to 4.0%, and we think it will stay around that level for most of next year.

Melanie Debono (Senior Eurozone Economist)Eurozone

15 Nov 2022 Eurozone Monitor Italy Uses "Savings" to Offer More Aid Against the Energy Crisis

• Italy’s new €9B aid package is skewed towards helping firms more than households, we think.
• It will not prevent a fall in GDP this quarter; the 2023 budget is coming, so brace for a rise in BTP yields.
• EZ energy-intensive industries recorded a fifth monthly fall in output in September; more is coming.

Melanie Debono (Senior Eurozone Economist)Eurozone