DAVY VIEW

With a challenging political backdrop for gilts at present, we continue to see UK rate-hike expectations as overdone. If this week’s UK labour market and consumer prices data remain in a dovish direction as we expect, this could prompt some movement away from three hikes to Bank Rate currently priced by markets. Ireland’s Q1 labour force survey is likely to show a slowdown in employment growth. However, our read of last week’s employee payrolls data is that a pick-up in growth was evident in Q1.