NATGAS: TTF Holds in €1/MWh Range Amid Rising Pipeline Supplies

• Four BOE MPC members will testify ahead of the Treasury Select Committee with regards to the August MPR on Wednesday. We will hear from Governor Bailey, Deputy Governor Lombardelli as well as external members Greene and Taylor.
• The main focus will be on Governor Bailey's remarks,. We think that he is the key swing voter and his vote is likely a necessity if we are to see a November or December cut (which at the time of writing only had 5bp and 10bp cumulatively priced). Therefore any comments he makes on his views of the economy, the need for an imminent cut or the rationale for skipping a quarterly cut would be hugely important for the market.
• Lombardelli gave little away regarding her personal view at the MPR press conference early in August but noted that she would elaborate on her rationale for a hawkish dissent (to keep Bank Rate on hold) in this forum. It's not clear how committed she is to Bank Rate remaining on hold (although there is nothing since the August decision has indicated that a change in view that a "skip" would not be favoured). If she sounds clearly open to a November cut that would be a dovish development. We would expect her to at least say that the future path of rates is down but that timing is uncertain for the next move - if she does not say this then it would be a hawkish signal.
• Similarly Greene has not made any notable public comments since her dissent in August either. She is still considered one of the more hawkish members, so unless she changes tone considerably it is unlikely her comments will be market moving unless she warns that there is the potential Bank Rate may have reached its lowest level and that no further cuts would likely in her opinion.
• Taylor is also known to be a dove - and favoured a larger 50bp cut in August (cementing him as the most dovish member of the Committee). As he is clearly a bit of an outlier in terms of his views, again his comments are unlikely to be that market moving.
• Breeden is due to speak separately this morning, but is unlikely to discuss monetary policy.

No material changes in ECB-dated OIS versus yesterday’s close, with regional focus on any remaining ECB commentary before the pre-September meeting quiet period goes into effect. There is virtually no implied probability of a September cut, and just 7.5bps of easing priced through year-end. Markets price 15bps of easing through the middle of next year, down from ~20bps just 5 days ago.

• This morning, acting Governor of the Slovenian Central Bank Dolenc re-iterated that rates are now likely to remain on hold at 2.00%, and that future moves “could go in either direction”. President Lagarde speaks at an ESRB conference today, so is unlikely to touch on monetary policy.
• The final August Eurozone services/composite PMIs are expected to confirm the modestly expansionary signal from the flash release. 

A fairly steady start for GBP STIRs after yesterday’s hawkish move.

• SFIZ5 has respected August lows, while SFIZ6 breached August lows yesterday.
• BoE-dated OIS shows ~8bp of easing through year-end, we continue to believe that the November meeting is much more “live” than the ~4bp priced into the market at present.
• Ongoing fiscal worry, some questions surrounding the future of Chancellor Reeves and the potential Budget date (26 November touted) dominate locally.
• Final UK services PMI data is due today.
• Elsewhere, BoE’s Bailey, Lombardelli, Taylor & Greene will appear in front of the Treasury Select Committee. We will provide a little more on that in due course.
• Note that BoE’s Breeden will speak this morning, although the setting of the address (a “money & payments” conference) may limit scope for comments on monetary policy.