Italian government bond trading volumes and yields saw sharp increases on Tradeweb’s European Government Bond marketplace over the last few weeks.
Weekly average daily trading volume (ADV) in Italian debt set a new record at EUR3.9 billion two weeks ago and was EUR3.8 billion last week, as market volatility rose around political news in Italy. The record volume marked an increase of 75 per cent relative to average weekly volumes in 2018 so far.
The previous record weekly ADV for Italian debt was reached during the summer of 2011 at EUR 3.5bn, when Italy’s 10Y benchmark bond yield rose from below 5 per cent to 6.25 per cent. Currently, yields on the Italian 10Y bonds are up by more than 130 basis points, and are 170 basis points wider relative to the German 10Y, from April closing levels. The country’s 2Y bonds are over 180 basis points higher today, and over 280 basis points – 310 basis points relative to the German 2Y – this month.
Meanwhile, May average daily volumes are up by over 60 per cent compared to both April 2018 and May 2017. Both trading volumes and yields have remained above levels seen during Brexit.
“Quote rates and hit rates for Italian bond enquiries on Tradeweb remained robust, despite ongoing market volatility,” says Enrico Bruni, head of Europe and Asia business at Tradeweb. “Strong platform metrics demonstrate that buy-side clients continue to receive competitive pricing throughout the sell-off in Italian debt.”