MNI China Daily Summary: Monday, May 13

MNI BRIEF: Beijing Reveals 2024 Bond Issuance Plan

MNI BRIEF: BOJ Cuts Scale Of 5-10 Year JGB Buying By JPY50 Bln

RPT-MNI POLICY:BCB Dissenters Feared Reaction Function Misstep

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

MNI: PBOC Sets Yuan Parity Higher At 7.1030 Mon; -4.18% Y/Y

MNI UK Labour Market Preview - May 2024 Release

EZ/UK Bond Supply Calendar: EU, IT Syndis; NE, UK, DE Due Tuesday

EZ/UK T-Bill Calendar: Spain, Finland Auction on Tuesday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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Overnight Implied Doubles Background Vol, Leaving CPI in Spotlight

GBP
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  • No let-up for GBP vols following this morning's wages and unemployment rate data - with overnights now capturing the Wednesday CPI release. Overnight implied has cleared 13 points, to double the YTD average background vol of 6.5 points - with today's appearance from BoE's Lombardelli in front of the TSC adding to the theme.
  • This blows out the break-even on an overnight GBP/USD straddle to ~65 pips, thereby capturing the cycle low and key support at 1.2409.
  • While wages topped expectations today, we note the key caveat being how much of this number can be explained by early wage rises relative to the National Living Wage rise that came into effect in April – captured by today’s data. Thereby, limiting the extent to which markets can reverse ’24 rate cut pricing.
  • This could make Wednesday’s inflation release more illustrative for monetary policy, and those looking for a corrective bounce eye a reversion back above the 200-dma at 1.2579 and fading GBP positioning, leaving markets far from stretched on the topside.
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  • No let-up for GBP vols following this morning's wages and unemployment rate data - with overnights now capturing the Wednesday CPI release. Overnight implied has cleared 13 points, to double the YTD average background vol of 6.5 points - with today's appearance from BoE's Lombardelli in front of the TSC adding to the theme.
  • This blows out the break-even on an overnight GBP/USD straddle to ~65 pips, thereby capturing the cycle low and key support at 1.2409.
  • While wages topped expectations today, we note the key caveat being how much of this number can be explained by early wage rises relative to the National Living Wage rise that came into effect in April – captured by today’s data. Thereby, limiting the extent to which markets can reverse ’24 rate cut pricing.
  • This could make Wednesday’s inflation release more illustrative for monetary policy, and those looking for a corrective bounce eye a reversion back above the 200-dma at 1.2579 and fading GBP positioning, leaving markets far from stretched on the topside.