This afternoon Governor Carney will appear in front of the Treasury Select Committee alongside FPC colleagues Alex Brazier, Martin Taylor and Anil Kashyap notes analysts at RBC Capital Markets.

Key Quotes

“The session will focus on the recent semi-annual Financial Stability Report. This presents plenty of scope for Carney to comment on Brexit but as per usual he should be expected to sidestep any attempts to get drawn into discussing the details of the monetary policy outlook during a hearing on financial stability policy.”

“The BoE will look to buy £1bn in the 7-15yr maturity bucket as a part of the ongoing APF programme. Only three bonds are eligible for today’s reverse auction (namely UKT 2.75% 2024, UKT 1.5% 2026 and UKT 4.75% 2030), with UKT 2% 2025 excluded on the back of the auction tomorrow and the rest omitted on account of low available free-float. With the 10yr auction due tomorrow, it wouldn’t be surprising to see the operation well attended today as the market creates further concession for the supply. For reference, the previous medium-dated reverse auction on 14 Dec was 2.64x offered with the BoE securing bonds at an average discount of 0.3bps at WAAP.”