BoE: too early to signal a May hike – TDS

According to analysts at TDS, a neutral statement and modest forecast changes should prevail for BoE as it's too early to signal a May hike.

Key Quotes

“Market volatility is one more reason to keep the BoE from rocking the boat.”

“The stronger macro backdrop skews risks for a more hawkish tone rather than a dovish surprise. We don't look for a truly hawkish turn until after the UK and EU27 finalise a transition agreement over the next two months.”

“FX: A steady BoE outcome should keep current GBP trends intact within recent ranges. A hawkish pivot could see some GBP upside risks emerge, but these seem modest for now as main investor focus is elsewhere.”

“Rates: Markets are well priced for the next 25bp hike around October 2018. Any reading on the pace of future hikes & terminal rate outlook will be our main focus. We favour Sonia steepeners into the meeting.”