Exposure rates of the Dorval Asset Management Range – 11th February 2019

Investors are faced with a whole range of concerns and from among them all, the question of Italy is now coming back to the fore.

Italian bond yields fell sharply after the agreement between the Italian government and the European Commission in December, but the country’s lacklustre economy – falling into recession in the second half of 2018 – is fuelling fears of further budget slippage and a fresh rise in public debt (cf. chart 1). Italy rates between one and three notches above junk bond status and does not appear to have much leeway at first glance, with ratings of Baa3 from Moody’s (since October 2018), BBB from S&P and Fitch, and BBB+ from DBRS.

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