EU CONSUMER STAPLES: B&M; equities show resilience on tariff sell-off

• The upcoming week sees monthly activity data for January released on Friday with some second-tier data releases also due (the most notable of which is BRC retail sales). We are unlikely to hear anything from the MPC (as we have entered the blackout period). The DMO will also release a provisional auction calendar on Wednesday for consultation ahead of the full release on Friday morning.
• We have now entered into the MPC’s quiet period ahead of next week’s Bank Rate decision. An unchanged Bank Rate is almost universally expected here: markets are pricing a close to zero probability of a move and all 20 of the sellside views that we saw following the February MPC meeting either looked for an unchanged Bank Rate at the time, or have revised their view since. Ramsden’s speech on Friday 28 February (in which he sounded less dovish but not completely ruling out a sequential rate cut vote) and last week’s TSC hearing (in which Governor Bailey sounded no closer to voting for a sequential cut) have left the arithmetic pointing firmly in favour of an imminent hold.
• See the Gilt Week Ahead for more on these.

• On the commodity front, the trend condition in Gold is unchanged, it remains bullish and the recent pullback appears to have been a correction. A stronger rally would refocus attention on $2962.2, a 2.00 projection of the Nov 14 - Dec 12 - 19 price swing. This would also open the $3000.0 handle. On the downside, a resumption of weakness would instead suggest scope for a deeper correction and expose support around the 50-day EMA, at $2823.8. The 50-day average marks a key support.
• In the oil space, a bearish trend condition in WTI futures remains intact and last week’s fresh short-term cycle lows reinforce current conditions. Recent weakness has resulted in a clear breach of support at $70.20, the Feb 6 low. This confirmed a resumption of the downtrend that started Jan 15 and has paved the way for an extension towards $63.61 next, the Oct 10 ‘24 low. Key short-term pivot resistance is seen at $70.54, the 50-day EMA.

Following are the Instant Answers for the Bank of Canada interest-rate decision coming Wed at 945am EST:

• Overnight Rate Target  (%)
• Does the Bank signal it’s prepared to cut rates in the future?
• Does the Bank say it could opt for a rate cut greater than 25bps in the future?
• Does the Bank say it judges that trend inflation remains close to 2%?
• Does the Bank say a trade war is already damaging the economy?
• Does the Bank say it must guard against the risk of faster inflation during a trade war?