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04.22.2026

BTP: Premium Shield

We remain tactically LONG on BTPs


We remain tactically LONG on BTPs, as we believe that the idiosyncratic premium embedded in the curve will continue to shelter BTPs from excessive widening in risk-off contexts against the backdrop of stable political equilibrium and ongoing fiscal discipline.

Meanwhile, until there is clarity on when traffic in the Strait of Hormuz will resume, we expect volatility in BTPs to remain high.
Against this backdrop, we recommend gradually extending exposure on sell-offs to the 3.95-4% area (vs. 3.85-3.90% previously), and we keep our threshold to turn NEUTRAL at 3.20%.
Strategically, we remain NEUTRAL at this stage. While we expect volatility to remain contained and BTPs to continue benefiting from their idiosyncratic premium, we do not see the case for 1) structurally lower core yields 2) lower BTP-Bund spread in the medium-term.

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Chiara Cremonesi 
Senior Rates Strategist
Investment Research


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