BOE: Pill sets high bar to him voting for a 50bp cut
"What I think is important to say is that the direction of travel is the same. The question is, how far, how fast? It's easy to say not too far or too fast, or not too slow or too little. Those are almost tautologies. What I think it's important to see is [MPC members] are forming judgments... across this assessment. And I think that assessment is taken yesterday. That is why people voted the way they did. That is why the outcome was a 25 basis point cut, with the signal that further cuts would be gradual and careful. But of course, were we to see a change in the flow of economic data, if you like, in the kind of jargon of economics, we were going to be subject to some new shock. We would have to assess the impact of that new data, try and work out whether that underlying shock, the underlying driver of those data movements, was more coming from the demand or supply side, and then recalibrate our policy to take into the effects of that on the evolution of UK inflation pressures, such that we're satisfied that we're maintaining this downward trajectory towards target, and doing so at a pace that we think is the appropriate place. So I think the short answer the question is, you don't want to rule anything out, but at the same time, given what we know now, at least for me, the kind of gradual and careful would not lead us to be running rushing to the more sizable moves in interest rates, even as some of our colleagues do."
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GILT PAOF RESULTS: The PAOF for the 4.375% Mar-30 Gilt was not taken up.
- GBP1.0625bln had been on offer.
- This leaves GBP 4.250bln of the gilt in issue.
STIR: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.27% (+0.00), volume: $2.322T
- Broad General Collateral Rate (BGCR): 4.26% (+0.00), volume: $858B
- Tri-Party General Collateral Rate (TGCR): 4.26% (+0.00), volume: $842B
- (rate, volume levels reflect prior session)
DENMARK: Foreign Min-Open To Dialogue w/US On Arctic Cooperation
Foreign Minister Lars Løkke Rasmussen speaking at a press conference in Copenhagen as US President-elect Donald Trump becomes increasingly vocal about his desire to take control of the Danish autonomous territory of Greenland. So far the Danish gov't has sought to contain the issue without overtly slapping down the president-elect's demands, with Copenhagen likely concerned that a public rebuke could result in retaliatory action from the incoming Trump administration.
- Rasmussen: "...within the Realm - Denmark, Greenland, and the Faroe Islands - we have a collective obligation to find our position in this somewhat more uncertain world. [...] This also includes being open to dialogue with the Americans about how we can potentially cooperate even more closely than we already do to ensure that American ambitions are realised,"
- Rasmussen: "Geopolitics is becoming more significant.[...] we are unfortunately also witnessing increasing great power rivalry. We see a Russia that is rearming itself. We see a China that is also starting to show interest. It is completely legitimate that both the United States [NATO & Denmark] are paying attention to this."
- Domestically the issue could prove a make-or-break for PM Mette Frederiksen's minority gov't. Trump's bullish stance could result in a 'rally round the flag' effect that sees even opposition parties uniting behind the PM and gov't. However, the gov'ts reliance on support in a confidence and supply agreement from deputies (including the two Greenlandic representatives in the Folketing) could leave it vulnerable to collapse if they withdraw support over the issue.
