What to watch (1/2)

A hugely busy day with the highlights the BOE and ECB meetings and will hear from Fed Governor nominees Raskin, Cook and Jefferson. On the data front we also have final services / composite PMI prints this morning across the Eurozone and UK (first reads from Spain and Italy) as well as US weekly claims data, PMI services, ISM services, factory orders and a final print of durable goods.

• The BOE policy decision, Minutes and MPR are all due for release at midday GMT with a press conference at 12:30GMT. The MNI Markets team expects a 25bp hike this week, along with the 26 sell-side analysts in our survey. Assuming a hike, the gilt maturing in March will almost certainly not be reinvested. Markets are fully pricing 50bp of hikes by March, but only 1/26 analysts in our survey sees that as their base case. We think markets shouldn't fully price a rate hike but that analysts are underestimating the probability. The inflation-forecasts should provide more of a medium-term steer for the market and we would prefer to stay away from trading near-term meetings and instead think there is more scope to seeing Red SONIA futures move higher. See the full MNI BOE preview here.