1) Recent Rates Movements
The gilts yield curve has exhibited contrasting dynamics across the periods under review, with short-term movements diverging notably from the longer-term trend.
- Past day: The 30Y yield rose by 9.10bps while the 2Y yield increased by 6.44bps, giving a Spread Change of +2.66bps. This is a STEEPENING move, with yields rising across all tenors but more pronouncedly at the long end.
- Past month: The 30Y yield increased by 20.74bps against a 17.52bps rise in the 2Y yield, producing a Spread Change of +3.22bps. This confirms a STEEPENING pattern, consistent with the daily trend, as the entire curve shifted upward with long-end yields outpacing short-end yields.
- Past year: The 2Y yield surged by 52.92bps, substantially outpacing the 30Y yield's 30.40bps increase, resulting in a Spread Change of -22.52bps. This represents a FLATTENING move, marking a clear reversal from the steepening observed over shorter horizons.
These verified shape changes carry distinct economic implications. Over the past day and past month, the steepening pattern reflects a broad-based rise in yields with greater upward pressure at the long end, potentially linked to shifting inflation expectations or term premium adjustments for longer-dated debt. Conversely, the past year's flattening move indicates that short-term yields have risen considerably faster than long-term yields, a pattern often associated with monetary policy tightening expectations being priced into the front end of the curve, while longer-term growth and inflation expectations have remained comparatively more anchored. The divergence between the recent steepening and the annual flattening trend underscores a notable shift in the relative pricing of short versus long-term risk within the gilts market over the past twelve months.