MNI Gilt Week Ahead - June 28 2021: Where are we re July 19?

• Last week saw the BoE meeting largely in line with expectations and has translated to only a few changes of views from analysts about the medium-term outlook for monetary policy.
• The focus for the beginning of the week will be on the announcement of whether the extension to lockdown will be ended early on 5 July. It looks almost certain that government will not pursue this option and instead will look to the 19 July date previously announced. However, how this statement is phrased will be closely watched. The Times suggests that new Health Secretary Sajid Javid will state that he is "confident" of the 19 July date and that he will hope to include all the previously announced measures, such as ending recommendations on wearing facemasks and ending social distancing.
• Looking at the Covid data, cases have reacceleration with cases over the past 7 days almost 60% higher than in the preceding 7 day period. Last week, this data had showed signed of slowing somewhat and was around the mid-30%s. The last time cases were around this level was early February, and case numbers are around 2/3 of the level at the time of the second national lockdown. However, at the time of the second national lockdown no one had been vaccinated. Now over 60% of the adult population have received one dose and 84% have received both. This has translated to much lower levels of hospital admissions. These are only around 15% of the level they were at the time of the second national lockdown, and only picked up just over 10% in the past week.
• In terms of economic data this week, we have the second estimate of Q1 GDP and current account data on Wednesday and final PMI prints on Thursday. Neither of these are likely to be huge market movers, with the GDP data now looking rather outdated (and reflective of a time of lockdown) while only the flash PMI data is a market mover at present.
• In terms of MPC events this week, the highlight will be Bailey's Mansion House speech on Thursday. There are a number of speeches from outgoing Chief Economist Haldane who completed his last meeting last week. Not an MPC member, but Andrew Hauser's comments on liquidity in government bond and repo markets on Tuesday will also be worth watching.

GiltWeekAhead28062021.pdf