Italian bond market: Net redemptions, rising yields

In April, resident sectors in Italy experienced overall net bond redemptions totaling €2.8 billion.

This outcome was primarily driven by negative net issues from other financial intermediaries and non-financial corporations, which contributed -€9.9 billion and -€1.7 billion respectively, summing to -€8.1 billion from these combined sectors.

Conversely, the general government recorded positive net issues of €3.2 billion.

This positive contribution was supported by net issues of BOTs (€7.6 billion), BTPs (€2.3 billion), and international securities (€2.1 billion).

However, these gains were partially offset by negative contributions from CCTs, which saw net redemptions of €8.8 billion.

Banks also contributed positively with net issues amounting to €2.1 billion during the month.

These figures highlight a mixed picture of issuance and redemption activity across different segments of the Italian bond market.

May saw an increase in gross yields to maturity for several Italian benchmark government securities.

The 3-year benchmark BTP yield rose by 2 basis points, reaching 2.92 percent, while the 10-year benchmark BTP yield also increased by 2 basis points, settling at 3.84 percent.

In contrast, the gross yield on 30-year benchmark BTPs remained stable at 4.61 percent.

Benchmark CCTs experienced a more significant increase, with their gross yield rising by 12 basis points to 3.25 percent.

Additionally, the Banca d'Italia announced that its Statistical Database (BDS) now includes a new table, SHI0100, providing quarterly data on securities held by resident institutional sectors, with data available from December 2021 onwards.