Overnight, S&P cut the Italian rating by one notch to BBB (outlook remains negative). The rating agency cites effects of further weakening growth on Italy’s economic structure and resilience, and its impaired monetary transmission as the main reasons for the downgrade. The downgrade brings S&P’s rating in line with Moody’s Baa2. At Fitch, Italy is currently rated one notch higher. Though the impact of rating agencies faded of late, an underperformance of Italian bonds can still be expected today. Especially when taking into account upcoming supply (tomorrow 3-yr & 30-yr BTP). Currently, ten-year government bond is weakening for the second day in a row, while the yield currently grows by 7 basis points to 4.48 percent.