- The discount of Italian BTPs over US Treasuries is driven by disinflation, not improved creditworthiness. CDS spreads suggest credit risks remain above pre-crisis levels.
- Italy’s economic stability is at risk, and until the ECB’s targeted loans program starts to support Italy’s SMEs, deflationary risks could undermine sentiment on BTPs.
- The May sell-off in BTPs on slumping Q1 output suggest bond investors are jittery. It offers investors a perspective on considering shorting BTPs as macro data may disappoint.
- Investors who share this sentiment may consider the following Boost ETPs: (www.boostetp.com/products)
Short Italian government bonds:
Boost BTP 10Y 3x Short Daily ETP (3BTS)
Boost ETP Research