Italy: Rating downgrade by Moody’s - TDS

Sandeep Kanihama FXStreet Contributor

Analysts at TD Securities note that Moody’s downgraded Italy one notch to Baa3 and set the outlook to stable after market close on Friday.

Key Quotes

“This was the first half of what we expect from the rating agencies, with S&P scheduled to make their decision on Friday. We look for them to move to a negative outlook, but wait to downgrade Italy’s rating until next year.”

“We have seen Moody’s decision calm BTP-Bund spreads from 340bps on Friday to 300 and S&P should further support that into a 280-300 range if we are correct. While the Italian leaders confirmed over the weekend that they would continue with their planned budget, they did make sure to reinforce that they are not looking to leave the Eurozone, as they hoped to reassure markets, as well.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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