LONDON, March 11 German Bund futures rose on
Monday after a downgrade by Fitch to Italy's credit rating
dented appetite for Italian bonds in favour of safe-haven
Fitch lowered Italy's sovereign rating by one notch to
BBB-plus, with a negative outlook, due to the political
uncertainty after inconclusive elections.
Markets have shown more resilience than expected to a
political deadlock in Italy, but the downgrade could add to
Italy's woes as it seeks to raise funds later this week.
German Bund futures were up 24 ticks on the day at
142.71 but were little changed from after-hour trading levels
hit on Friday. Italian BTP futures
"They (Fitch) are only playing catch up with the others,"
one trader said, referring to the fact that Standard & Poor's
already rates Italy BBB-plus and Moody's rates the country Baa2.
Both ratings carry negative outlooks.
"But we remain negative on Italy. We still think the market
is too complacent on Italy, so we are still looking for the
10-year yield spread to widen versus Bunds," the trader added.