What to watch

The Asian session saw a small bid in core fixed income which appears to be continuing in early European trading, but was largely devoid of any major headlines. STIR futures have also moved a little higher on the day.

• Markets are likely to continue to see price action and yields as the major driver today with little data on the calendar. Yesterday ECB's Villeroy said that "I think there were perhaps reactions that were very high and too high in recent days" regarding market moves. There are no scheduled ECB speakers today but Schnabel is due to hold a Twitter Q&A this afternoon.
• The highlight of the European session will be a speech by BOE Chief Economist Huw Pill entitled “UK Monetary Policy outlook”. Text of the speech will be released and there will be a Q&A at the Society of Professional Economists conference. Note that Pill spoke on Friday at the NPR National Agency briefing and stated that “one shouldn't assume interest rate rises will be aggressive in the medium term." We would expect more of the same from him this week. It will be interesting to see if he addresses the moves in markets since the MPC decision directly, or if he continues to point to inflation undershooting target if Bank Rate is 1.50%, citing the forecasts. Note that gilt yields are a bit off of yesterday's highs when the 10-year yield breaching 1.50% for the first time since November 2018.