Morgan Stanley: The yield spread between Italian and German 10-year bonds may widen in the short term and then narrow afterwards

They stated: “Our framework indicates that the 10-year BTP versus German bund [yield spread] will see a brief widening at the start of the month, followed by a period of narrowing lasting until mid-September, with a median change of about 8 basis points.” According to Tradeweb data, the current 10-year BTP versus German bund yield spread is 78 basis points.