Fixed Income: European Outlook
European Fixed Income Outlook: European debt futures are likely to open with a negative bias, in line with overnight Treasuries, continuing the downward correction started yesterday afternoon. The local calendar has a U.K. focus with the August 6-7 BoE Minutes on top of the agenda. We expect the August minutes to show yet another split 1-7-1 vote, with Besley arguing for a hike (although yesterday’s comments from Besley could indicate a steady hand vote), while ultra-dove Blanchflower should continue to favour a rate cut. We expect the minutes to underpin an outlook for steady rates ahead, with fears of dislodging inflation expectation deterring the MPC from cutting rates. On the U.K. data slate, July public sector finances, M4 money growth and August CBI manufacturing orders.