POLAND: NBP Governor Holds Presser, Coalition Leaders Discuss Strategy

Estoxx: +0.20%, Dax: +0.08%, CAC: +0.06%.

The Swedish April services PMI fell further into contractionary territory to 48.4 (vs 49.3 prior), the lowest since September 2023. The three analyst forecasts submitted to BBG had a range of 49.0-50.5.  The release appears broadly consistent with the April Economic Tendency Indicator services sub-component, and underscores the downside risks to economic activity stemming from US tariff-related uncertainty. The Riksbank are unanimously expected to hold rates at 2.25% on Thursday, but growth risks leave scope for a dovish guidance tilt.

• Expected employment fell to a 6-month low of 45.3 in April, from 47.3 prior.
• Meanwhile, the supplier input price index was 56.2 (vs 58.9 prior).
• Production fell to 46.4 (vs 47.9 prior), while new orders were 47.6 (vs 48.8 prior).
• Supplier deliveries rose to 55.4 (vs 53.7 prior), while order backlogs ticked up to 50.0 (vs 49.7 prior).
• Expected production ahead remained expansionary at 58.1 (vs 59.9 prior).

Hawkish adjustments in GBP STIRs after the long weekend, with the firm prices paid component in the U.S. ISM services survey and a reversal of Monday’s losses in oil eyed.

• BoE-dated OIS 0.5-1.5bp less dovish across ’25 meetings, showing a 25bp cut for this week’s decision, 38bp through June, 57.5bp through August and 90.5bp of easing through year-end.
• A reminder that more than 100bp of cuts were priced through December at one point last week.
• SONIA futures flat to -4.5. SFIU6, the current loose proxy for BoE terminal rate pricing, shows an implied rate that is 12.5bp above Thursday’s dovish cycle extreme, last 3.415%.
• Thursday’s BoE monetary policy decision headlines the UK calendar this week.
• We expect a 25bp cut, in line with market pricing and all sell-side views we have read.
• We have outlined some potential dovish tweaks to the Bank’s guidance verses in the statement, which could pave the way for consecutive rate cuts over the next 3 meetings.
• Final services PMI data is due today, although that should be much less of a market mover.