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BTP Yields Plummet: Anticipated Rate Cuts in 2024

Italian State Bonds, known as BTP, continue to experience a decline in yields, reaching lows not seen since August 2022. The Italian 10-year yield stands at 3.59%, while the German Bund is at 1.96%, touching levels last witnessed in December 2022.

BTP: Current Scenario

Looking at Eurozone yields, the benchmark Italian 10-year BTP hits 16-month lows, while the German Bund sits at a one-year low. The 10-year BTP yield is 3.59%, a level unseen since August 2022. Meanwhile, the 10-year Bund falls below the 2% threshold, settling at 1.96%, marking lows from December 2022.

Market Operators’ Bets

Market operators are betting on central banks making rate cuts in 2024. The rate cut prospects are bolstered by declining annual inflation data in the Eurozone for November, showing a slowdown to +2.40% from October’s +2.90%.

BTP: Spreads and Market Trends

The spread between BTP and Bund remains stable at 161 basis points, opening at 161 and closing with minimal changes compared to the previous day. The yield of the Italian 10-year bond drops by four basis points to 3.58%, returning to levels last seen in August 2022. Investors closely monitor this situation amid expectations of rate cuts.

International Context

The global market is attentive to potential rate cuts by Jerome Powell’s Fed and Christine Lagarde’s ECB in 2024. Bets center around a possible cut as early as the March 2024 meeting, with a 50% probability.

Impact on Sterling and UK Bonds

In the UK, annual inflation in November slows to 3.9% from October’s 4.6%, but the core CPI shows a year-on-year increase of 5.1%. Nevertheless, traders are betting on a rate cut in March, influencing the pound and British government bonds.

BTP: U.S. Outlook

Expectations for the Fed indicate a 67.5% probability of a rate cut in the March 2024 meeting. Unlike the ECB, Powell confirms the possibility of cuts, while Lagarde continues to emphasize resistance to the prospect of rate cuts.


The market is in turmoil with BTP yields plummeting, fueling bets on imminent rate cuts in 2024. Investors remain cautious, observing international dynamics and the monetary policy outlook of major central banks.


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