Italy’s consumer price index rose a record 6.8% year-on-year in May, the highest since 1990, according to data released by the National Institute of Statistics (ISTAT). The euro BTP bond price also reacted to this news. Seems like the authorities should polish their knowledge of what is euro bonds and what is euro bond market.
Euro-BTP Italian bond futures price today
The war in Ukraine and the slowdown in international trade have contributed to rising prices, the Xinhua news agency reported, citing ISTAT. The price data was slightly below the preliminary estimate of 6.9%.
However, it was still the highest annual price increase in Italy since the creation of the euro currency, as well as the steepest increase since 1990. According to ISTAT, today the euro BTP bonds futures price is affected by the following:
- The monthly inflation rate in May was 0.8%.
- Energy products caused the biggest jump in prices, up 42.6% year-over-year.
- Prices for general goods increased by 9.7% in May, mainly due to higher production and transportation costs, while prices for services rose by 3.1%.
As the euro BTP bond exchange suggests, the trading takes place at the level of 120.
ECB to avoid the depreciation of euro BTP bond cost
The European Central Bank (ECB) is making every effort to support Italy (including the euro BTP futures price) and other countries in the eurozone, whose economies have been hit hardest by the consequences of the SARS-CoV-2 coronavirus pandemic. The institution is actively buying euro BTP bonds.
Today, about 11.8 billion euros were spent on the purchase of an Italian euro BTP bond. This is significantly more than what the ECB rules provide, Reuters notes.
Criticism of the ECB in Italy amid the euro BTP futures price
In Italy and some other countries, the ECB came under fire after its chairman, Christine Lagarde, told a press conference that the bank’s role was not to close the spread in sovereign debt markets. This statement of the head of the ECB led to an increase in the euro BTP bond cost and caused sharp criticism in Rome.
As a result, Lagarde changed her position, and the ECB announced a €750 billion asset purchase program aimed at mitigating the economic impact of the COVID-19 pandemic.
What is euro bonds?
Eurobonds are fixed-income debt securities traded on the stock market. The difference from ordinary bonds is that they are issued in a currency other than the currency of the state where the issuer is located.
Such assets are traded on the euro BTP bond exchange.
What is euro bond market?
If there are not enough funds for the development of a company or even the state, they want to borrow them. To do this, the issuer (and this can be a state, a company, a bank, etc.) usually issues bonds or Eurobonds, sells them to investors, receives money from them, and solves its problems. In other words, they go to the euro bond market – a place where euro-BTP Italian bond futures are traded.