Turnaround on the Milan Stock Exchange with the United States postponing attacks on Iran after “very good and productive talks in the last two days”, writes Donald Trump on Truth. Milan rises by 2.45%% with the Ftse Mib at 43,675 points. The spread, which reached a maximum of 104 points, slipped to 84 basis points with the yield on the Italian 10-year bond falling to 3.8%.
The nervousness of the markets in the first part of the morning
Piazza Affari in mid-morning, with the Ftse Mib index dropping 2.62% to 41,716.87. The developments in the war in the Middle East are worrying after Donald Trump’s ultimatum to reopen the Strait of Hormuz within 48 hours, with the threat of hitting the country’s power plants, and Tehran’s response which warned of the possible complete closure of the Strait. On the price list, Tim marks +2.5% after the takeover bid launched by the Italian Post Office, which instead slips to 9.6%.
Spread above 100 points
A day of strong tension on European government bonds, while the conflict in the Middle East continues for a fourth week and the increase in energy costs intensifies expectations of a rate hike by the ECB. The yield on 10-year German Bunds jumped above 3%, that of 10-year BTPs to 4.1%, the highest level since November 2023, with the spread rising to 104 points and then falling back below 100. The rate on French OAT government bonds also rose, to 3.85%, the highest level since mid-2009. Oil prices jumped after Iran threatened attacks on Israel’s power grid and US military supply chains, in response to Trump’s threat to destroy Iran’s energy sector if the Strait of Hormuz remains closed, a sharp reversal from his recent assertion of a de-escalation of the war.
With markets now pricing in three ECB rate hikes in 2026, the central bank’s latest rate hold has been overshadowed by upwardly revised inflation forecasts and downgraded growth prospects, underscoring the growing economic repercussions of the escalating crisis.