⁍ S&P affirms Italy rating at BBB, lifts outlook to stable.

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⁍ Italy’s two-year yield falls to one-year low.

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⁍ Move reduces risk of other agencies downgrading Italy to junk.

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– Italy’s borrowing costs dropped across the curve on Monday, with short-dated bond yields hitting a one-year low, following ratings agency S&P Global’s unexpected upgrade of the country’s ratings outlook to stable from negative. The revision late on Friday of Italy’s sovereign outlook offered some unexpected good news for the euro zone’s third-largest economy and cements its long-term credit rating at BBB for the foreseeable future, reports Reuters. Investors were worried about the possibility of a near-term downgrade to BBB from S&P, which has it on a higher credit rating than Moody’s or Fitch Ratings. A downgrade from S&P would have put the country’s credit rating from all three main rating agencies one notch above junk. “The S&P move reduces near-term risks of Italy falling below investment grade that would have had implications on BTP holdings by real money accounts and market pricing,” said Annalisa Piazza, an analyst at investment manager MFS.