MNI China Daily Summary: Friday, December 27

MNI BRIEF: BOJ: Rate Hike Chance Nearing; Mull Patiently

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MNI JAPAN NOV JOBLESS RATE AT 2.5%, UNCHANGED FROM OCT

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MNI: US REDBOOK: DEC STORE SALES +5.0% V YR AGO MO

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AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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STIR: Less Than 75bp Of BoE Cuts Now Priced Through '25

STIR
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Hawkish adjustments in the GBP short end owing to the previously covered move further out the curve and cross-market swings.

  • SONIA futures now flat to -5.5.
  • 73bp of BoE cuts now priced through ’25. Last close below 75bp of cuts being priced over that horizon came on November 22.
  • Next 25bp move still more than fully discounted come the end of the March MPC.
  • Labour market data headlines the UK calendar tomorrow, with CPI data then due on Wednesday. They provide the final inputs for Thursday’s BoE decision.
  • Our base case is for an 8-1 vote split on Thursday (with Dhingra again preferring a 25bp cut), although soft CPI and wage data could lead to additional dissents for sequential cuts from either Taylor or Ramsden.
  • The quantity side of the labour market has already shown signs of further deterioration through recent survey data (DMP, Indeed etc.).
  • We still think the official ONS labour quantity data is far too unreliable to provide any real input into the BoE’s decision-making process.

BoE Meeting

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Hawkish adjustments in the GBP short end owing to the previously covered move further out the curve and cross-market swings.

  • SONIA futures now flat to -5.5.
  • 73bp of BoE cuts now priced through ’25. Last close below 75bp of cuts being priced over that horizon came on November 22.
  • Next 25bp move still more than fully discounted come the end of the March MPC.
  • Labour market data headlines the UK calendar tomorrow, with CPI data then due on Wednesday. They provide the final inputs for Thursday’s BoE decision.
  • Our base case is for an 8-1 vote split on Thursday (with Dhingra again preferring a 25bp cut), although soft CPI and wage data could lead to additional dissents for sequential cuts from either Taylor or Ramsden.
  • The quantity side of the labour market has already shown signs of further deterioration through recent survey data (DMP, Indeed etc.).
  • We still think the official ONS labour quantity data is far too unreliable to provide any real input into the BoE’s decision-making process.

BoE Meeting

Keep reading...Show less