BOE: Taylor, Bailey to speak this week, DMP data also due
Jun-30 15:53
Outside of the welfare reform vote, external MPC member Professor Taylor will also be a panellist at Sintra on Wednesday in a panel entitled “Central bank communication: current challenges”. This will likely be an interesting event, both given it being the first major appearance since the June MPC meeting in which Taylor has spoken and given the BOE’s current examination of its communications strategy. Taylor will speak again on Friday on the neutral rate of interest. This will also be a very interesting topic, given that the Bank’s official communications continue to reference Bank Rate being restrictive, but very rarely give much guidance on the level of neutral. Taylor is of course a dove and has dissented in recent meetings, but there has been little commentary from any MPC member (other than Mann who refers to the MaPS survey) on the level of neutral since the February MPR, when it was noted that model-based estimates put the neutral rate at 2.25-3.75%.
We will also hear from Governor Bailey on a panel alongside Fed’s Powell, ECB’s Lagarde, BoJ’s Ueda and BOK’s Rhee on Tuesday. We heard from Bailey twice last week, and he didn’t really say anything to guide future policy in either appearance, so we expect more of the same.
The data highlight of the week will be the Decision Maker Panel data where firms’ expectations of own price rises and wage increases over the next 12 months (and in recent times) will be the most watched components.
EURIBOR OPTIONS: Z5 / Mid Curve Call Combo
Jun-30 15:51
ERZ5 98.25 call vs 2RZ5 98.00 call, trades for -1.5 to -1.0 in 15k paper to paper.