US 10YR FUTURE TECHS: (M5) Impulsive Rally Extends

• This afternoon sees four members of the MPC testify ahead of the Treasury Select Committee regarding the February MPR. The four members will be Governor Bailey, Chief Economist Pill and external members Greene and Taylor.
• There will also be the Annual Report of Greene published at 14:30GMT.
• The event is the penultimate scheduled for MPC speakers ahead of the pre-March meeting blackout (there is a Mann speech tomorrow - but she has already communicated her views following the February meeting).
• Governor Bailey is likely to echo a lot of what he said at the MPR press conference - particularly as he is considered close to the centre of the MPC in terms of his views. His vote may be needed to accelerate the pace of cuts past once per quarter.
• Pill hasn't really gone off script too much recently - after previously being seen as one of the more hawkish members of the MPC. With other members of the MPC likely more dovish than him, his rhetoric would be more market moving if he makes a dovish tilt rather than if he makes a hawkish tilt.
• Greene, similarly, is viewed as one of the most hawkish MPC members - but joined the rest of the Committee in voting for a cut in February.
• Since the February MPR, data on the whole has been largely in line with expectations or a little stronger (particularly on the activity side). We will particularly be watching for any categorisation of individuals' views of the probability of each of the cases.
• Note that last week Ramsden's stance shifted somewhat last week. We had previously expected him to continue to vote for sequential cuts but he pointed to the Agents' Pay Survey coming in close to the top end of expectations as one of the more concerning aspects for him at the moment. We still would put him as one of the more dovish members (albeit less so than Dhingra, Mann or Taylor) but we are not convinced he will vote for a March cut anymore.

While GBP STIRs have taken impetus from offshore developments, hawkish moves lag those seen in European peers, which is understandable given relative sensitivities to looser German fiscal policy (the tabling of which is the main driver for today’s hawkish adjustments).

• BoE-dated OIS shows ~54.5bp of cuts through year-end, after being unable to force a test of 50bp during this morning’s hawkish move.
• The next 25bp cut is once again fully priced through the June MPC, we continue to look for a May cut at this stage.
• SONIA futures flat to -14.0, off session lows.
• Monday’s low in SFIZ5 held during the morning sell off, with most contracts across the strip failing to test their February lows.
• Similarly, the likes of 1y1y and 2y2y swaps don’t test February highs.
• Modest dovish reaction to the softer-than-expected U.S. ADP employment data seen in recent trade.
• BoE's Bailey, Pill, Greene and Taylor will make a Treasury Select Committee appearance at 14:30 GMT, we will provide a primer on that shortly.

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• US President Donald Trump again made life difficult for Republican lawmakers by adding more demands to his tax agenda, pitching at his address to Congress a tax cut for companies manufacturing their goods in the US and suggesting interest payments on US-made autos should be deductible.
• Trump boosted Senate Republicans by reiterating his support for making his 2017 tax cuts permanent in the GOP reconciliation bill – likely to require a risky move by Congress to cost the TCJA at zero dollars.
• Trump conceded that his tariff regime could prompt “a little bit of an adjustment period”.
• Commerce Secretary Howard Lutnick appeared to open the door for tariff relief on Mexican and Canadian imports.
• Lutnick emphasised that the North American tariffs are about fentanyl. He said “trade policy” will kick in on April 2 with Trump's reciprocal tariffs.
• Trump is likely to be under increasing pressure from Republican lawmakers representing agricultural and auto manufacturing states to lay out a long-term tariff strategy.
• Trump will meet Republican hardliners today to advocate for a Continuing Resolution to keep the government funded through the end of the fiscal year.
• Trump noted in his address to Congress that he “appreciated” an “important letter” from Zelenskyy, hinting he may be open to re-engaging with Ukraine on a mineral deal.
• Poll of the Day: A large majority of speech watchers approved of what they heard from Trump.

Full article: US DAILY BRIEF