ECB: Lane: Alternative Scenarios To Be Provided In June

• 8,500 TYM5 112.5 calls 31 vs. 110-31/0.28% at 1058:27ET

(MNI) London - The Chinese Embassy in the UK has pushed back against UK criticism of Chinese firm Jingye, which owns British Steel. Over the weekend, the UK gov't stepped in with emergency legislation that stopped just short of nationalising British Steel after Jingye said the blast furnaces at Scunthorpe would be turned off. The embassy spox accused some British politicians of rhetoric that is "absurd, reflecting their arrogance, ignorance and twisted mindset.". 

• The Guardian reports comments from UK Secretary of State for Business and Trade Jonathan Reynolds saying "the UK had “got it wrong in the past” about allowing Chinese investment in strategically important industries such as steel, and highlighted the influence of the Chinese government on private companies. “I wouldn’t personally bring a Chinese company into our steel sector,”.
• Embassy spox: "Any words or deeds that politicise or maliciously hype up business issues will undermine the confidence of Chinese business investors in the UK and damage China-UK economic and trade cooperation"
• This comes as Bloomberg publishes an article claiming that UK officials have raised concerns about Chinese-made drones taking high-res pictures of strategic UK infrastructure. BBG: "One British official said the drones issue is challenging as the government tries to balance its public pursuit of closer economic ties with Beijing with its private frustrations that companies working in sensitive areas are not taking seriously the potential security threat posed by China."

Asked at the post-meeting press conference why the BOC didn't cut today given downcast numbers in the MPR and communications, Gov Macklem says:

• "the short answer is, the Canadian economy is starting from a good place. There's a lot of uncertainty, and we're we're navigating carefully... in March, we said we would be less forward looking and we would be proceeding carefully with further changes in our policy rate. ... Look, a lot has happened in the last five weeks since our March policy decision, but really, the situation is no clearer. I mean, tariffs have been announced, they've been imposed, they've been retracted, they've been threatened again. So at this meeting, we decided to leave our policy rate unchanged while we wait for more information on what's going to happen with US tariffs, and while we assess the impacts of increased uncertainty and and higher US tariffs. the message is we're navigating carefully. Our goal is to ensure that Canadians stay confident in price stability."
• Asked about how to balance risks of higher inflation with weaker growth: "we're going to do as much as we can to support the economy while maintaining our primary focus on price stability. "
• Re the Statement noting that BOC is prepared to "act decisively" as things become clearer, Macklem is asked about potential for a larger than 25bp cut or an intermeeting cut. He says that the word "decisively" is not "a code word for anything". In using that word, "I was really trying to convey how we're thinking about monetary policy through this period of uncertainty. So the point is that right now the outlook is really clouded, and so we're being less forward looking than normal...if the data is tilting clearly in one direction or the other, we can respond decisively. "
• MNI's Greg Quinn asks about the BOC's view on whether the US dollar's role as a global reserve currency is in question - Senior Deputy Gov Rogers says: "I think it's premature to read anything sort of structural into what we're seeing, or to kind of get ahead of ourselves and and declare those kinds of things. I mean, we did see some unusual moves in US yields, but they've settled down since then."
• Asked if the BOC is open to a 50bp cut in June if needed, Macklem doesn't specifically rule it out but is unsurprisingly vague: "We're deliberately not giving a lot of forward guidance because the situation is very clouded. I think I've been pretty clear that in this very clouded situation, we're going to proceed carefully. There are there's a lot of uncertainty about tariffs, there's opposing forces on inflation. We're starting from a good place. Inflation is well controlled. controlled to close to 2%. Our interest rate is right in the middle of our neutral zone. We've got flexibility, and we're going to have to be flexible and adaptable as as we move forward. "