MNI Gilt Week Ahead: Saunders and March activity data

• Last week’s MPC was less hawkish than markets expected but more positive than some economists expected. We therefore saw some analysts bring forward their expectations of the next hikes (but there were only a few who raised their expectations of the terminal rate). Markets, on the other hand, saw a more substantial repricing but still almost fully price in one 25bp hike for each of the remaining MPC meetings this year (and price in small probabilities of 50bp hikes for the next three meetings).
• There has been a notable reduction in MPC post-meeting communication. Saunders is the only MPC member due to speak this week.
• Elsewhere we will see the first print of Q1 GDP, alongside March activity data (including monthly GDP, IP, index of services and trade). We have to wait for next week for the next labour market, inflation and retail sales releases.

GiltWeekAhead20220509.pdf