Morgan Stanley: Short-term potential for widening and then narrowing of the yield spread between Italian and German 10-year bonds.

Rate strategists at Morgan Stanley said in a report that seasonal factors suggest a brief widening window in the yield spread between 10-year Italian BTPs and German bonds in July, followed by a narrowing. They stated, "Our framework suggests a brief widening at the beginning of the month, followed by a narrowing phase lasting until mid-September, with a median change of around 8 basis points." According to Tradeweb data, the current yield spread between 10-year BTPs and German bonds is 78 basis points.