BoE Pricing Steeper, Geopolitics Dominates

As mentioned elsewhere, weekend/early Monday BoE speak didn’t see much in the way of meaningful, narrative shifting rhetoric.

• That has left the unwind of some of Friday’s geopolitical-based hedging activity at the fore, with core global FI markets better offered and BoE-dated OIS firmer and steeper as a result.
• Liquid contracts on the strip run little changed to 5bp firmer as of typing.
• Terminal policy rate pricing now sits ~17bp above prevailing levels, come February '24, with a more modest 8bp of tightening priced for next month's gathering.
• Excluding the aforementioned BoE speak, UK weekend headline flow saw continued focus on familiar themes, namely inflation’s impact on consumers and well-documented housing market worry.
• Tomorrow’s partial labour market report, Wednesday’s inflation data suite and Friday’s retail sales readings provide plenty of onshore tier one data interest this week.
• Elsewhere, Tuesday will see comments from BoE dove Dhingra.