HUNGARY: Hungary to Call on US if HUF Comes Under “Speculative Attack”

Long end swap spreads lead the widening on the UK curve this morning, seemingly driven by spill over from Fed Chair Powell signalling the potential end to QT in the “coming months”.

• 30-Year swap spreads ~1.5bp wider vs. closing levels, while 2- & 5-Year spreads are closer to 0.5bp wider on the day.

Germany has announced it will be looking to sell the following at its auction next Tuesday, October 21:

• E750mln of the 1.30% Oct-27 Green Bobl (ISIN: DE0001030740)
• E750mln of the 2.50% Feb-35 Green Bund (ISIN: DE000BU3Z047)

• BOE Deputy Governor Dave Ramsden is due to speak on a panel at the Single Resolution Mechanism’s 10th Anniversary Conference in Brussels beginning at 9:00BST. There will be no text released but the event is being streamed here.
• The panel is not on monetary policy. It is entitled "Resilience without borders; Lessons and leverage from global cooperation." with the agenda noting that "This panel will explore the international dimension of bank resolution. Discussions will focus on global cooperation and cross-border challenges in the resolution framework."
• We therefore think it would be unlikely (but not impossible) for Ramsden to discuss monetary policy this morning. If he does we would expect him to remain on the dovish side and keep the door open to a cut. His recent comments have shown that he remains concerned about the labour market and he has in the past noted how much attention he pays to wage settlement data when deciding his vote. Yesterday's labour market data showed a notable slowdown in private regular wage growth but showed some upward revisions to recent payroll growth - pointing to a slowing but not disastrous labour market. See our full review here.
• Also note that Governor Bailey (the likely swing voter in Q4) spoke last night and said that "I've been saying for some time that I think we're seeing some softening of
  the labour markets...and that broadly is the story that I pick up. I think we saw it in the numbers this morning." He added: "On the other hand, balancing that off, we've got inflation above  target...so balancing these two things is the thing that we're having to do." He wasn't any more specific in his comments Tuesday on his read of the latest data but we think this shows that he maintains optionality for a Q4 cut.