Mizuho Look For Continued Widening In BTPs Into ECB

Mizuho write “we expect curves to remain flat, while not necessarily flattening much further for now. There’s been large moves of late. Unless there’s data which points towards more stagflation, the market may naturally see a slight retracement steeper. Meanwhile 2- to 5-Year BTPs managed to see some strength in Monday’s session, potentially on the back of outright yield buying. The 30-40bp selloff in 2-Year BTPs over the prior week will have been tempting to some. Our strategy for BTPs remains the same: more widening into the ECB meeting; unlikely to see much easing in measures like the 10s30s BTP-Bund box.“