JP Morgan: Increased chances of Greece being upgraded by Moody's on March 15

As JP Morgan reports, on March 15 Moody's is set to review Greece's rating and there is a "decent" chance of giving it the investment grade (IG). Moody's is the only major rating agency that still has Greece under the investment grade.

In this context, it remains overweight on Greek 10-year bonds, compared to Italian ones, due to reduced supply pressures in the coming weeks and also as a possible risk hedge. Greek bonds underperformed Italian bonds during the risk-off move last week, JP Morgan reports.

However, last week the agency made a surprise and in an extraordinary note gave credit to the Greek banks for their performance, at a time when the whole market is waiting for its verdict on March 15. After all, it is the strictest of the systemic rating agencies, while it has a stable outlook, which indicates that no change is expected, at least immediately.

In the previous assessment of Greece, Moody's had proceeded with a double upgrade of the creditworthiness of the Greek economy, to Ba1 from Ba3 with a stable outlook. As it had stated, the upgrade by two notches reflects the view of the agency that the Greek economy, public finances, institutions and the banking system are seeing a deep structural change, which will support a continuous substantial improvement in the creditworthiness and resilience indicators future potential shocks.