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STIR: 36.5bp Of BoE Cuts Priced For Dec, CPI & Labour Market Data Due This Week

STIR
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BoE-dated OIS little changed to start the week, showing 22.5bp of cuts for November, 36.5bp of cuts through year-end and 102.5bp of cuts through June.

  • SONIA futures flat to +3.0, after gilts & Bunds rallied into the final close of last week.
  • UK headline flow remains geared towards fiscal policy in the run up to the Budget.
  • This morning will see dovish BoE dissenter Dhingra participate on a panel at Reserve Bank of India’s 90th anniversary high-level conference. She might not offer too much on UK monetary policy given the setting. If she does, expect her to remain dovish.
  • Inflation data will cross on Wednesday, following labour market data on Tuesday.
  • For CPI, air fares, cultural services and furniture prices all provided upside to last month’s print. These areas could pose some downside risk this month while catering services could provide some upside risk. Hotel prices remain volatile.
  • For the labour market data we think that most focus will remain on private regular wage growth - which remains notably above levels consistent with target inflation but is slowly moderating.
  • The MPC will watch the data closely - particularly following Governor Bailey’s comments that the BOE could be “a bit more activist” if good news on inflation continues.

BoE Meeting

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BoE-dated OIS little changed to start the week, showing 22.5bp of cuts for November, 36.5bp of cuts through year-end and 102.5bp of cuts through June.

  • SONIA futures flat to +3.0, after gilts & Bunds rallied into the final close of last week.
  • UK headline flow remains geared towards fiscal policy in the run up to the Budget.
  • This morning will see dovish BoE dissenter Dhingra participate on a panel at Reserve Bank of India’s 90th anniversary high-level conference. She might not offer too much on UK monetary policy given the setting. If she does, expect her to remain dovish.
  • Inflation data will cross on Wednesday, following labour market data on Tuesday.
  • For CPI, air fares, cultural services and furniture prices all provided upside to last month’s print. These areas could pose some downside risk this month while catering services could provide some upside risk. Hotel prices remain volatile.
  • For the labour market data we think that most focus will remain on private regular wage growth - which remains notably above levels consistent with target inflation but is slowly moderating.
  • The MPC will watch the data closely - particularly following Governor Bailey’s comments that the BOE could be “a bit more activist” if good news on inflation continues.

BoE Meeting

Keep reading...Show less