The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Win Thin

NEW YORK ( BBH FX Strategy) -- Here are some thoughts regarding Standard & Poor's announcement late Friday that it cut its outlook for Italy's single-A-plus rating to negative.

Although we remain negative on the ratings for peripheral eurozone countries, we don't think a downgrade of Italy by S&P is clearly warranted. Our sovereign ratings model currently has Italy at A+/A1/A+ for S&P, Moody's and Fitch, respectively, vs. actual ratings of A+/Aa2/AA-.

If anything, we had expected a move by either Moody's or Fitch, not S&P. With rating agencies still clearly on the warpath, we can't rule out a downgrade here, but the case for a downgrade of Italy just isn't as glaringly obvious as the others in the periphery.

Indeed, Italy's numbers have always been bad, and have in fact stayed remarkably stable during this crisis even as the rest of the periphery blew up.

As a point of reference, the implied ratings for Italy, Ireland, Portugal, and Greece all started out at A+/A1/A+ when we began our model in June 2009.

But since then, Italy's implied rating has remained at A+/A1/A+ even as those for Portugal, Ireland, and Greece have sunk precipitously to junk levels. Spain's implied ratings started off in June 2009 at AA/Aa2/AA but have since fallen to A/A2/A.

Clearly, the downgrade story will remain in play for the periphery for much of 2011. Other weak eurozone credits to watch out for are Belgium and France, with both facing some mild downgrade pressures.

Our model has France as a borderline AA+/Aa1/AA+ credit vs. actual ratings of AAA/Aaa/AAA, and also Belgium as a AA/Aa2/AA credit vs. actual ratings of AA+/Aa1/AA+.

Last week's downgrade of a major French bank due to its exposure to Greece is a warning sign that the sovereign rating itself for France may come under greater vulnerability.

With regards to Belgium, we suspect that if there is still no government in Belgium by mid-June, it will likely be downgraded by S&P, which it threatened to do near the start of this year. In other words, it is possible that the next country that gets its rating cut could very well be a core one, not a peripheral one. That would certainly get the market's attention.

--Written by Win Thin of BBH Forex Strategy.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.