UK T-BILL AUCTION RESULTS: 1/3/6-month UKTBs

FFV5/X5 ~2.9K given at -15.5.

• Yesterday’s CPI report has seen core PCE estimates for July center on 0.25% M/M (across eight analysts) vs a tentative 0.31% M/M prior to CPI (across five analysts).
• It implies a very similar pace to the 0.26% M/M in latest data for June and would see the Y/Y firm to 2.87% for its fastest since February.  
• There’s a relatively narrow range of 0.22-0.28% considering PPI is still to come tomorrow. 

• Wells Fargo: 0.22%
• JPM: 0.24%
• Nomura: 0.24% (vs 0.33 pre-CPI)
• NWM: 0.24%
• TDS: 0.25%
• UBS: 0.25% (vs 0.33 pre-CPI)
• GS: 0.26% (vs 0.31 pre-CPI)
• BofA: 0.28% 

• “Our call for a Riksbank August rate cut has been challenged by high summer inflation prints. We believe this outweighs concerns over weak economic activity, leading us to expect the Riksbank to hold rates in August”.
• “Although some economic indicators have come in weaker than expected, this is unlikely to prompt immediate policy action in the current inflation environment. At its August meeting, the board also lacks updated staff forecasts, which may be needed to assess the outlook with enough confidence to look past the current inflation overshoot”.
• “A full report also offers additional scope to explain the rationale for a rate cut even as inflation remains elevated. Lastly, with the markets pricing a low probability – less than 10 percent – of an August rate cut, a pause could be in line with monetary policy and contribute to stability in turbulent times”.
• “We forecast that the Riksbank will deliver another rate cut in September to support economic activity and guard against inflation falling too far going forward”.