OIL: WAF Crude Diffs Flat amid Muted December Programme: Reuters

• Governor Bailey is due to speak today to deliver the keynote speech at Scotland’s Global Investment Summit 2025. The text will be released at 16:00BST here.
• There is no title attached to the speech and it is therefore unknown at this point whether Bailey will be discussing anything relevant for monetary policy.
• With speeches from both Deputy Governors Breeden and Ramsden last week leaning to the dovish side (neither ruled out voting for a November cut) and with Dhingra and Taylor voting for a sequential cut in September, Governor Bailey's position as the swing voter has been further cemented in our view.
• Therefore anything he says on monetary policy could be market moving, particularly anything on the dovish side given current market pricing (with only 1bp priced for a November cut and 5bp priced by year-end).

ERM6 98.50/98.625/98.75/98.875c condor, bought for half in 10k (ref 98.07).

Late on Friday J.P.Morgan turned bullish on front end swap spreads for several reasons:

• Quarter end passing meaning that funding conditions are likely to remain soft.
• Accumulated Other Comprehensive Income (AOCI) at banks set to increase modestly, potentially improving their demand for Tsys.
• Spread narrowness offers pickup vs. IOR
• Expected slowing of $IG issuance.
• As a result, they recommended longs in 3-Year swap spreads and 3s/5s swap spread curve flatteners.