Mizuho Look To Buy On Dips

Ahead of today’s BoE decision Mizuho don’t expect “any changes in the vote split but think there is a risk of one of the hawkish dissenters becoming part of the centrist camp.”

• “Gilts have enjoyed decent demand from investors in the last few weeks, outperforming vs USTs and Bunds.”
• Their view on Gilts “hasn’t changed. With inflation expected to fall below 2.0% temporarily, we still expect dip-buyers to add Gilts on any cheapening. We continue to see Gilts bull-steepening in the coming months as data will likely allow the BoE’s MPC to become more dovish (we see the first cut in September), but we prefer to wait for Gilts to cheapen from current levels before reloading.”
• “Any strength in today’s PMIs will likely put yesterday’s rates rally to the test.”