ECB: June Accounts: A Few Members Saw A Case For No Cut

• Date $MM Issuer (Priced *, Launch #)
• 06/03 $3B #AfDB: $2B WNG 3Y SOFR+33, $1B WNG 10Y SOFR+64
• 06/03 $2B #Prov. of Ontario: 10Y SOFR+95
• 06/03 $1.5B CPPIB 5Y SOFR+54
• 06/03 $1.25B #Kommuninvest +3Y SOFR+39
• 06/03 $500M IADB 2030 tap SOFR+40
• 06/03 $Benchmark Hong Kong 5Y Green +50
• 06/03 $Benchmark NAB 3Y +65a, 3Y SOFR, 5Y +75a

Bailey, Breeden, Dhingra and Mann have concluded their testimony to the Treasury Select Committee. Here are the key highlights:

• Breeden's view: We learned that Breeden would have voted for a 25bp cut in May irrespective of global factors and she didn't describe the decision as close. She also explicitly noted that the Minutes stated not all members who voted for a 25bp cut held this view. So she seems to have distanced her view a little from Lombardelli and Breeden and is tilted a little more to the dovish direction. She noted that nothing had changed to challenge the Agents' pay settlements expectations.
• A popular line amongst MPC members now is that the direction of the rate path is downwards but the timing and terminal point are very uncertain. We have seen this line in other recent MPC appearances, and expect it to continue making appearances going forward.
• There was no discussion of June and a cut then appears off the table. There was also no steer to either August or beyond, so knowing that Breeden is a bit more dovish is the key takeaway view here - particularly as she doesn't speak that much and so we can assume that unless something materially evolves in terms of pay settlements that she is likely to be at least as dovish if not more so than Governor Bailey.
• Rate projections: Governor Bailey said that using market paths in the rate projections made little sense and seemed to suggest that eventually market paths probably wouldn't be used at all but that there was quite a bit of work for the BOE staff to do before they could get to this point.
• On scenarios: All of the members agreed that the scenarios and model improvements had improved the MPC's discussions and that they enabled them to quantify effects and run different aspects through the model (Mann used an example of the steepness of the Phillips curve).
• Labour market data: Both Bailey and Breeden pointed to relying more on the HMRC data as well as other labour survey data given LFS issues.
• Surveys to get namechecked by Bailey: Agents and DMP surveys (both are BOE surveys), PMIs, CBI surveys, Lloyds Bank survey.

• US Data/Speaker Calendar (prior, estimate)
• 03-Jun 1000 Factory Orders (3.4% rev, -3.0%), ex-Trans (-0.4% rev, 0.2%)
• 03-Jun 1000 Durable Goods Orders (-6.3%, -6.3%), ex-Trans (0.2%, 0.2%)
• 03-Jun 1000 Cap Goods Orders Nondef Ex Air (-1.3%, -1.3%), ship (-0.1%, -0.1%)
• 03-Jun 1000 JOLTS Job Openings (7.192M, 7.100M)
• 03-Jun 1000 JOLTS Job Openings Rate (4.3%, --)
• 03-Jun 1000 JOLTS Quits Level (3.332M, 3.271M), rate (2.1%, --)
• 03-Jun 1000 JOLTS Layoffs Level (1.558M, 1.614M), rate (1.0%, --)
• 03-Jun 1130 US Tsy $60B 6W bill auction
• 03-Jun 1245 Chicago Fed Goolsbee moderated Q&A 
• 03-Jun 1300 Fed Gov Cook economic outlook (text, Q&A)
• 03-Jun 1530 Dallas Fed Logan, Fed listens event (text, no Q&A)