Spread under 140 points with ECB. In one year almost 200 points less

The political crisis with a happy ending, at least for the markets, and now the ECB is opening the taps again. After the tensions of last year, especially due to the conflicts of the yellow-green government with the EU Commission of Juncker, the spread has begun to fall in recent weeks, completing a path that began last November 20, when Brussels avoided rejecting the Italian maneuver. Today the spread between BTP and German 10-year Bund closes below 140 basis points, at 138 points, with the Italian BTP falling by 10 basis points to 0,86%, after having touched a historic low of 0,75% on the secondary market. The spread, in particular, falls to its lowest since May 2018, settling almost 200 points below the peak of over 330 points last autumn. The downward tear in the spread comes thanks to the surprise move by the president of the ECB, Mario Draghi. Vincenzo Longo, market strategist at Ig Italia, points out that if the cut in the deposit rate from -0,40% to -0,50% and the maxi-TLTRO3 loans to banks, measures adopted today by the ECB, "were already partly discounted by the market", this was not the case for the purchases of government bonds, which analysts and economists expected, eventually, later. "The real news - Longo specifies - concerns the restart of quantitative easing of 20 billion euros per month starting from November 2018st. It was the only measure on which there was no full consensus on the market and, apparently, also within the ECB, even if a large majority was reached, Draghi then specified". Italy, a country with a high debt, is naturally the first to benefit from less pressure on public accounts with the purchases of BTPs. "The beneficiary - explains Longo on QE - is Italy, which benefits most of all from the ultra-accommodative attitude of the ECB and, as evidence of this, the spread fell intraday to the new lowest levels since May 136, at 200 basis points. Hence also the leap of Italian banks, which make Piazza Affari the pink jersey in Europe, followed by other peripheral countries". Draghi's moves, in short, are the icing on the cake for the spread, which had fallen below the ceiling of 5 points at the end of August, in the midst of the consultations at the Quirinale, when it was now clear that we would be moving towards a solution to the government crisis that would bring together the PD and MXNUMXS.