Risk appetite unabated by Italian downgrade

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Investors will continue to seek exposure to Italian credit risk despite last month's ratings downgrade, say dealers. Fitch Ratings and Standard & Poor's both reduced their credit ratings by one notch on October 19 in response to what both agencies described as inadequate fiscal reform.

Credit spreads widened following the dual announcement, with five-year credit default swaps (CDSs) closing at 10 basis points on the day of the downgrades - up 1.1bp on the previous day's close, according to Lo

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