markets

Spain Yield Spread Narrows Before Possible Fitch Upgrade: Chart

The yield premium investors demand on Spanish 10-year debt over German bunds fell to its lowest since March 2015 as traders anticipated a potential credit upgrade by Fitch Ratings on Jan. 19, driven by an improving economy. If Fitch boosts Spain to A from the current BBB+, that could spark greater appetite for the debt, said Jaime Costero, a rates strategist at Banco Bilbao Vizcaya Argentaria SA, who sees the move upward as “highly” possible. Despite political turbulence in the rebel region of Catalonia, the Spanish economy is forecast to extend a four-year recovery as unemployment continues to fall.

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