📝BTP-Bund Spread to Widen to 300Bps In Q4: Société Générale

The 10-year Italian BTP-German Bund yield spread is expected to widen faster than the French and Spanish bond yield spreads in the second half of the year. Expect the 10-year BTP-Bund spread to widen to 240bps in 3Q and to 300bps in 4Q. The war in Ukraine has weakened the outlook for economic growth and fiscal consolidation, while inflation will likely continue to surprise to the upside. The ECB's antifragmentation tool could delay the widening in country spreads, but it is unlikely to eliminate it. - Société Générale Strategy