Friends who invest in government bonds know perfectly well that the new month begins with BTP/BOT auction programme nice printed next to the monitor. Planning is in fact the first rule to follow to buy sovereign bonds with an investment perspective.
For this reason, as is now our custom, in view of the beginning of May 2023, we propose the summary program of the BTP/BOT auctions on the agenda.
What can be found in our document? Not the characteristics of Treasury bills and long-term bills being issued. In fact, those are announced with a communication that the Treasury issues a few days before the auction. What can be found is the list of all the hot dates, i.e. both the days in which the auction is scheduled and the even more important ones in which communication by the MEF is expected with the details we mentioned earlier.
That being said, let’s get right into the subject.
BTP/BOT auctions May 2023: what to expect
The month of April was characterized by a flooding of emissions in the last ten days of the month. If this happened it was because of the Easter festivities. May will be much leaner from this point of view.
Being the only scheduled holiday that of May 1st (which also falls on a Monday) there will be no problems for one more uniform spreading of the rods of both types of government bonds.
To date, no extra placements are foreseen (for example of BTP Italia) and therefore the program is the usual one of 5 issues (with BTP Short – BTP€ia making a fixed pair).
The fact that the entire BOT/BTP auction schedule is spread evenly throughout the month can easily be deduced by simply reading the sequence below:
- 10 May 2023: first BOT auction
- 11 May 2023: medium and long-term auction
- 25 May 2023: BTP Short Auction – BTP€i
- May 26, 2023: second BOT auction
- 30 May 2023: second medium-long term auction
In short, the timing for May would seem to be more uniform than that of the past months, even if the usual tendency to concentrate more appointments in the last week of the month remains.
BTP auction May 2023: the detail
The 2023 BTP auction calendar for May includes three appointments. These are the three monthly classics that have always characterized the Treasury programme.
As with every month, the dates are already known, while as regards the duration of the bond being issued (therefore the maturity date), the amount of the annual coupon, the ISIN identifier and the issue range, it will be necessary to wait for the specific communication from the MEF which will then be taken up again on our page on upcoming BTP auctions.
Some more information can already be obtained at the beginning of the month by consulting the quarterly BTP issuance program referring to the second quarter of 2023. This document contains information on the new BTP issues scheduled for the period between April and June as well as some of the reopenings on the agenda. Net of the operations already carried out last month (for example, the issue of the new 10-year BTP in the auction of 27 April 2023), there remain a series of placements that could also be carried out in May (but it is not certain that they will be).
So here are the three appointments scheduled with the BTPs in May 2023.
MEF communication date, BTP issues and regulations May 2023
To facilitate the setting up of an investment strategy by fellow readers who usually invest in government bonds, here is our usual easy-to-consult chart. Three dates are indicated for each auction: that of the publication of the Treasury’s press release (the most important for operational purposes!), that of the actual auction and that of the settlement.
Times are always the same:
- submission of applications at the auction at 11.00 on the day of the placement
- submission of additional auction applications by 3.30 pm on the day following the auction
- 8 May 2023: medium-long term communication
- 11 May 2023: medium and long-term auction
- April 15, 2023: medium and long-term settlement
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- 22 May 2023: short term communication + BTP€i
- 25 May 2023: short-term auction + BTP€i
- 29 May 2023: short term settlement + BTP€i
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- 25 May 2023: medium and long-term communication
- 30 May 2023: medium and long-term auction
- May 1, 2023: medium and long-term settlement
The results of the auction will be announced at the end of the placement, therefore between 11 and 11.30 on the execution day of the operation
BOT auctions May 2023: the details
Two appointments with the auctions of Treasury bills in May as indicated by the 2023 BOT issuance calendar.
However, what the calendar does not say and which instead is increasingly becoming a custom on the part of the MEF is that the new issues of Ordinary Bonds are accompanied by the reopening of bonds already being issued (and therefore BOTs with a short residual life). Even in one of the BOT auctions in April there are 2 reopenings and 0 new issues.
This means that it is even more important to consult the details of the single transaction which will be communicated by the Treasury on the dates indicated below. This information (identity of the security being issued, any reopening, ISIN, duration and placement range) will be reported by us on the page dedicated to the Next BOT auction which we recommend saving in your favourites.
And here are the hot May dates for BOT auctions.
MEF communication date, BOT issues and regulations May 2023
For each section, the communication date, the auction date and the settlement date are indicated. Unlike BTPs, no overruns in the following month.
- May 5, 2023: BOT communication
- May 10, 2023: BOT auction
- May 12, 2023: BOT regulation
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- May 23, 2023: BOT communication
- May 26, 2023: BOT auction
- 31 May 2023: BOT regulation
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Government bond auctions in May 2023: expected yields still high?
In the last auctions of BTPs and BOTs, yields gave the impression of being in a phase of consolidation. After the continuous growth of the previous months, therefore, lately the trend seems to have slowed even in a context characterized by high yields.
As always, the number one catalyst is the ECB’s monetary policy decisions. It is true that analysts (S&P and Goldman Sachs in this case have received conflicting perspectives (we talked about it in this article), however, staying on the concrete, an important fact emerged in April: contrary to what is hoped by the markets, there will be no easing in the rate of increase in reference rates. Unlike the FED, therefore, the EuroTower will continue to leverage the cost of money. According to analysts, it is plausible that there may be increases until September and then an adjustment. For the reversal of monetary policy, however, it will be necessary to wait for the new year.
The indications we have expressed in these two posts therefore remain valid:
The strategy therefore always remains the same: buy now and then cash in over time when the dynamics change.
And speaking of strategy, the May of government bonds begins for our readers with two analysis articles that have been very popular in recent weeks. We propose them again:
Happy May 1st to all our readers!
2023-05-01 21:19:17
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