Italian bond market sees net redemptions and falling yields in late 2025
The Banca d'Italia reports net bond redemptions by resident sectors in December 2025 and a decrease in Italian government bond yields in January 2026. General government net issues were negative, while benchmark BTP and CCT yields declined.
Net Redemptions Across Italian Sectors
In December 2025, Italian resident sectors recorded net bond redemptions totaling €11.2 billion.
This outcome was largely driven by the general government, which posted negative net issues of €11.7 billion.
Specifically, BTPs, BOTs, international securities, and local government securities contributed negatively to this figure, with CCTs being the only positive contributor (€3.9 billion).
Banks also experienced significant net redemptions, amounting to €4.5 billion.
Conversely, other sectors collectively showed positive net issues of €5.0 billion, primarily due to other financial intermediaries, while insurance corporations and non-financial corporations recorded slight net redemptions.
Government Bond Yields Decline
January 2026 saw a notable decrease in gross yields to maturity for Italian benchmark government securities.
The 3-year BTPs declined by 5 basis points to 2.46 percent, while 10-year BTPs fell by 6 basis points to 3.49 percent.
Longer-dated 30-year BTPs also saw a reduction of 5 basis points, settling at 4.39 percent.
The gross yield on benchmark CCTs followed a similar trend, decreasing by 4 basis points to 2.75 percent.
These movements reflect shifts in market sentiment during the reference period.
Market Dynamics Reflect Broader Trends
The data confirms a trend of easing financial conditions in Italy, aligning with broader European market movements.
While net redemptions for government bonds suggest fiscal discipline or reduced borrowing needs, the falling yields indicate strong investor demand.
This combination points to a stable, if not improving, perception of Italian sovereign risk, despite ongoing economic challenges.