On Friday, Fitch upgraded the Spanish.......>

RATINGS: On Friday, Fitch upgraded the Spanish rating by one notch to A-

(stable) and S&P made a one notch upgrade to Greece's rating to b (positive

outlook). 

- Ioannis Sokos and Anne Karina Asbjorn at Nomura note that the Spanish upgrade

came earlier than expected (they had expected H2) but that the upgrade was a

question of "when", not "if".

- Nomura remark that "reason behind it is in line with our assessment that

positive macro fundamentals were more important than the ECB. This is also why

we expect more upgrades in the periphery in 2018".

- According to Nomura, Spain's upgrade does not have any technical implications

as it was investment grade both before and after Fitch's rating update and there

are no implications for ECB operations.

- In terms of the implications for the Spanish sovereign debt market "the fair

value of the (10yr) ASW spread should be around 17bp. The 10yr BTP-SPGB ASW

spread has widened from 28bp to 53bp, which is too wide in our view and we

entered a long 10yr BTP vs SPGB trade."