MNI Gilt Week Ahead - November 9, 2020

• After the Bank of England's decision to extend QE by GBP150bln last week but extending purchases for the whole of 2021, we will hear from Bailey (twice), Haldane and Tenreyro this week. Perhaps most interesting will be Haldane's speech on Monday as he discusses Covid-19 and the long-term implications for the UK. There had been a number of analysts expecting Haldane to vote against an increase in QE after his dissent for the previous extension but instead he voted alongside the committee. It will be interesting to hear if he discusses more of his rationale for this. Note that we discussed our views on some potential changes to the technicalities of QE in BoE Review: November 2020 - It's all in the detail.
• Brexit talks will continue this week with Barnier back in London but there is little to report on new developments at this stage. Elsewhere, it's a heavy week for data, but given that we have moved into a second period of lockdown in England, the data are already looking rather stale. Probably most important will be the labour market data which are due for release on Tuesday. If there is a large increase in redundancies or rise in unemployment then this will contribute to the eventual bounceback being more muted. Thursday will see monthly GDP for September along with its constituent components and the first print of Q3 GDP. Even if the September data is much better or worse than expected there will be very little change in policy from the Bank of England or market reaction.
• Note that the DMO has stated that it would hold consultations and announce its December auction calendar in advance of the 25 November Spending Review. The consultations could happen as soon as this week now that the MPC decision is out of the way. We also think that there is a good chance that the auction of the 0.125% Aug-28 linker auction scheduled for 25 November will be moved to 26 November.

GiltWeekAhead09112020.pdf