BONDS: Limited Dovish Reaction To Taylor Headlines
Limited dovish reaction in Gilt futures on the back of BOE Taylor’s comments, which has seemingly spilt into EGBs.
- Gilt and Bund futures each ~10 ticks higher following the headlines, with Bunds now +27 at 131.78 and Gilts +47 at 91.89.
- The headlines suggest Taylor is largely echoing comments from his speech on Wednesday, so there isn’t much new information at first glance. We will provide further analysis in due course.
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US DATA: Mortgage Applications Tread Water
- MBA composite mortgage applications dipped -0.7% last week (sa) after increasing 5.4% the prior week.
- Refis pulled back a touch with -2.6% having surged 27% the week prior.
- New purchase applications meanwhile edged 1.4% higher after -4.1%, with the previous increase dissipating after what appeared to be a lagged response to lower mortgage rates heading into the fall.
- New purchase applications are at 61% of 2019 levels vs 36% for refis.
- The 30Y conforming mortgage rate increased 8bps to 6.75%. It has averaged 6.70% in the last three weeks, which compares to a recent high of 6.9% in early Nov and September lows of around 6.15%.
UK: BOE: Instant Answer Questions for December meeting
Instant Answer questions for the December 2024 policy decision. Outcome to be posted at midday Thursday.
1. Was the Bank Rate changed, and if so by how much?
2. Number of members voting for 25bp cut?
3. Number of members voting for unchanged rate?
4. Number of members voting for other policy action?
NB: On questions 2-4 we will name the dissenters (and the magnitude of dissent)
5. Did the MPC drop reference to a “gradual approach” to removing “policy restraint being appropriate” from their Statement?
6. Did the MPC say that “the risks from inflation persistence are receding”?
7. Did the MPC again say Bank Rate is likely to “remain restrictive for sufficiently long”?
8. Did the MPC again say it will “decide the appropriate degree of monetary policy restrictiveness at each meeting”?
9. Did the MPC leave its guidance paragraph materially unchanged versus the November policy statement?
MNI: US MBA: MARKET COMPOSITE -0.7% SA THRU DEC 13 WK
- MNI: US MBA: MARKET COMPOSITE -0.7% SA THRU DEC 13 WK
