MNI Gilt Week Ahead:

• Last week saw another notable move in market-pricing for the BOE following external MPC member Catherine Mann’s webinar in which she seemed to be on the fence between voting for a 25bp and 50bp hike at the May meeting (although caveating that with waiting for the MPR projections to decide on her exact course of action. The market now fully prices a 25bp hike with around a 20% probability of a 50bp hike. However, it is important to note that Mann has been one of the more hawkish members of the MPC over the past few months. She was one of the four MPC members voting for a 50bp hike in February and also voted to end asset purchases early in November. Bailey’s comments later saw little market movement.
• This morning we have seen markets pare back some of the expectations for hikes this year, but there is still more priced than a week earlier. Ahead of the Easter holiday, around 144bp was priced in for this year, and this reached a peak of and 168bp last week following hawkish comments from Mann, as well as Fed’s Powell and ECB’s Wunsch and de Guindos. Around 152bp is now priced at the time of writing.
• Looking to the week ahead, there are no scheduled speakers (given the proximity of next week’s MPC meeting) and we only have second tier data. However, despite having little economic impact there will likely be focus on Tuesday’s public finance data given that the DMO normally adjusts its financing mandate following the outturn of CGNCR for the fiscal year just ended.
• See the full document for auction previews for the week ahead, the issuance calendar and cash flow matrix.
• Note there will be no Gilt Week Ahead publication next week due to the holiday and BOE preview. It will return on 9 May.

GiltWeekAhead20220425.pdf