FICC Focus: Trump/Bessent Northeast Asia Visit, US CPI, and IEA Oil Report

Mizuho's FICC strategy focus for the week of May 11, 2026, centers on geopolitical tension in the Middle East and its impact on energy prices and central bank policy. Key trades include shorting EUR/USD and betting on higher US terminal rates as strong economic data clashes with an energy-driven inflation shock.

Key Takeaways

• 1.The US-Iran conflict and resulting energy price shifts are the primary drivers for central bank rate path pricing, with BoE and ECB hikes contingent on energy stability.
• 2.Global diplomacy is in focus with US Treasury Secretary Bessent visiting Japan (urging BoJ rate hikes) and President Trump visiting China to discuss Iran and trade.
• 3.Mizuho is maintaining high-conviction short positions in EUR/USD (target 1.15) and Dec 2027 SOFR futures (SFRZ7) due to strong US data and upside inflation risks.

Table of Contents

• What's in the Slide deck?
• Market Performance
• What's priced in?
• Mizuho FX, Policy and Rates Forecasts
• Events ahead
• Week ahead – Trump/Bessent visit Northeast Asia, US CPI, IEA Oil Report
• Will US-Iran find a way to make a deal?
• Rates Supply
• Current trade ideas
• Broader Risks on our mind
• USD trades
• EUR trades
• GBP trades
• JPY trades
• Credit Monitor
• Equities and other markets

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial