Stock markets still falling, Milan (-1.9%) the worst in Europe. The spread rises to 150 then falls back

Second day with some tension for European government bonds which are paying the price of a more uncertain picture emerging from the European elections. In particular, the new elections called in France, with rather uncertain outcomes, make the picture difficult to decipher in the immediate future. In uncertainty, more is sold, especially country bonds […]

Second day with some tension for European government bonds that pay the price of a more uncertain picture emerged from the European elections. In particular, the new elections called in France, with rather uncertain outcomes, make the picture difficult to decipher in the immediate future. In uncertainty you sell more, and above all the bonds of the most vulnerable countries as Italywhich, for its part, emerged from the electoral round without repercussions for the government majority.

However, the yield differential between ten-year bonds (spread) Italians and Germans rose up to 150 basis points only to then narrow down to 145. Un 10 year BTP now pays 4.07%, after rising to 4.16%, while the German equivalent offers 2.62%. Tensions also on French securities, with yields reaching 3.3% and then returning to 3.2%. Bond yields are fixed in absolute terms but expressed as a percentage of the value of the security. The increase in percentage returns is therefore determined in reality by the decline in the value of the securitydetermined by the fact that sales exceed purchases until the equilibrium is re-established at a lower price.

The stock markets did badly, all falling in Europe. Madrid and Milan were the worst, respectively – 1.9% and – 1.6%. Paris follows with the index down by 1.3% while Frankfurt’s decline stops at -0.8%. The banking sector is suffering (banks own many government bonds and are closely linked to the vicissitudes of the reference countries). In Paris BNP Paribas fell by 3.9%, Société Générale by almost 3%. In Milan, Intesa Sanpaolo down 2.5% ed Unicredit of 3.7%. In Madrid BBVA lost 1.7%. Euro also falling against the dollar todaywith – 0.3%.