EMISSIONS: EU Member States Urge Bloc to Put Forward Critical Chemicals Act

• Catherine Mann has long presented herself as having an “activist” rather than hawkish stance. Through the hiking cycle she dissented in favour of larger hikes in 6 of the 14 meetings through which Bank Rate was increased. Throughout this time she noted that she favoured front loading hikes and then when the facts changed to also then opt for a faster cutting cycle.
• She then voted four times while Bank Rate was maintained at 5.25% in favour of further hikes (never subscribing to the wider MPC’s “Table Mountain” view) and only moved away from voting for hikes in March 2024. She also dissented against the rate cuts delivered in August and November.
• We would be very surprised if Mann did not follow up her dovish dissent (50bp vote for a cut last week) by voting for more cuts at least in March and May but we aren’t quite sure how far she will want to cut Bank Rate as it was noted in the Minutes that she thought that “monetary policy would need to remain restrictive for some time to anchor inflation expectations, and Bank Rate would likely stay high given structural persistence and macroeconomic volatility.”

Latest block trade lodged at 09:08:03 London/04:08:03 NY:

• TYH5 14K lots blocked at 109-07, looks like a seller.
• DV01 ~$896K.

Bobl Block trade suggest seller:

• OEH5 ~4.7k at 117.83.

Some notable early Volume in the 5yr part of curve, since Bobl already trades more than the Bund.