Moody to Downgrade Spain Soon

Normally rating agencies go hand in hand. After S&P downgrade, other rating agencies were likely to follow.

And here comes Moody, which is, as per Barclays, supposed to downgrade Spain below investment grade. This is definitely going to increase pressure on Spain for ESM aid.

"With Moody’s likely to downgrade Spain below investment grade, and S&P at the threshold and maintaining a Negative Outlook, expectations may again rise that Spain could face exclusion from bond indices," Barclays clarifies.

"In fact, a potential reason for not doing so – avoiding a potential downgrade to sub-investment grade as primary market bond purchases would likely be interpreted as having lost market access by credit agencies – may have just lost relevance."