EU: Agri Ministers Meet With Mercosur FTA In The Balance
EU agriculture ministers are meeting in Brussels in an effort to reach an agreement on the stalled E...
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STIR: GBP 1y1y Nears Upper Boundary Of Wedge, Mostly On Global Cues
Spillover from hawkish moves in the EUR short end have helped pull GBP 1y1y away from the base of its multi-week range and towards the upper boundary of the wedge formation that we have previously highlighted. November highs were tested earlier.
- Firmer salary indications from the latest REC report on jobs would have also had some hawkish feedthrough, even with the survey (on the whole) pointing to ongoing slack in the labour market.
- A reminder that we highlighted the need for fresh dovish catalysts if we were to see a move lower last week, with weakness in wider core global FI markets (largely centred on hawkish EUR repricing) providing the hawkish impetus in the time since.
- BoE-terminal rate pricing has moved back above 3.40% after threatening a clean break below 3.30% in recent sessions.
- Participants still need to be cognisant of spillover from hawkish moves in wider core global FI, particularly given the potential for relatively heavy received GBP positioning being built up over the past couple of months.
- To the downside, potential multi-week dovish domestic catalysts include dovish messaging alongside an almost fully discounted December BoE rate cut, further deterioration in labour market data and swifter than envisaged progress towards the Bank’s inflation target.
Fig. 1: GBP 1y1y Swaps (%)
Source: MNI - Market News/Bloomberg
JAPAN: Red Tsunami Warning Issued For Areas Of Northern Japan
A red tsunami warning has been issued for Iwate, the Pacific coast of Aomori and southeastern Hokkaido following a powerful earthquake off the coast of Aomori prefecture. A red warning indicates waves up to ~3m or more, with instructions to evacuate immediately from coastal and river areas due to the life-threatneing situation. Yellow and blue warnings, indicating a lesser degree of danger, have been issued for the eastern and southwestern coasts of Hokkaido, the west coast of Aomori, Miyagi, and Fukushima prefectures.
BOC: Expected Instant Answers For Bank of Canada Interest-Rate Decision
Following are the Instant Answers for the Bank of Canada interest-rate decision due Wed at 945am EST:
- Target for overnight rate:
- Does the Bank signal it is prepared to lower rates in the future?
- Does the Bank signal it is prepared to raise rates in the future?
- Does the Bank say the policy rate appears appropriate if its economic forecast is realized?
- Does the Bank signal it intends to leave rates on hold?
