VIEW: Unicredit note that "the rating..........>

BTPS: VIEW: Unicredit note that "the rating announcement by Fitch was

unscheduled and the timing was somewhat unfortunate. While at face value, the

decision by Fitch aligns its rating with Moody's, we nevertheless expect the

decision to put BTPs under pressure this morning for a number of reasons. First,

the rating action comes as a surprise and will remind investors of Moody's

review scheduled on 8 May. Moody's Baa3 rating is already only one notch above

investment grade. Second, BTPs have performed quite well over the last few days,

partly reflecting relief after the S&P review led to no rating action. Third,

Fitch's action comes just before a BTP/CCT auction this morning, a factor that

could further contribute to the pressure. The sell-off may be short-lived, as

the ECB will in all likelihood confirm tomorrow that the central bank is ready

to take further action if needed and will continue to provide support in the

secondary market with PEPP purchases. The 10Y BTP-Bund spread closed at 220bp

yesterday, a move back towards 250bp seems likely ahead of the review by Moody's

on Friday next week. For those investors wishing to hedge against further

pressure on BTPs, we would recommend positioning short 5Y BTP vs. 2Y and 10Y"