Market insights
Recent rate movements
Using the 2Y tenor as the short rate and the 30Y tenor as the long rate, the curve shape changed as follows.
- Over the past day: Spread Change = (-5.99) - (-6.89) = +0.90 bps, a STEEPENING move, though marginal. The 2Y fell 6.89 bps and the 30Y fell 5.99 bps, so the long end declined slightly less than the short end.
- Over the past month: Spread Change = (-26.90) - (+4.05) = -30.95 bps, a FLATTENING move. The 30Y fell 26.90 bps while the 2Y rose 4.05 bps, so the gap between long and short yields narrowed substantially.
- Over the past year: Spread Change = (+48.22) - (+103.72) = -55.50 bps, a FLATTENING move. Both yields rose, but the 2Y increased by 103.72 bps compared with 48.22 bps for the 30Y.
The verified move types show a mixed short-term picture and a consistent flattening over longer horizons. The one-day steepening was minimal and reversed the direction seen over the past month and past year, so it does not alter the broader pattern. The flattening over the past month reflects a sharp fall in long-end yields alongside a modest rise at the short end. Over the past year, the much larger rise in the 2Y yield relative to the 30Y yield is consistent with short-term rates having risen more than long-term rates. Historically, a flatter curve of this kind has been associated with market expectations of tighter near-term monetary policy relative to longer-run expectations. The data alone do not establish the drivers behind these moves, so these points describe the observed yield changes rather than their causes.
Spread to the fitted curve
On 2 November 2026, the spread of the 1½% Green Gilt 2053 (TG53) to its interpolated curve yield widened to 5.74 bps, up from 1.74 bps on the prior trading day. This is a rise of roughly 4 bps in a single session. Over the past month, the spread had ranged between about 1.5 and 2.4 bps, so the move is a clear break from recent behaviour. The reading also sits above the anomaly upper threshold of 4.65 bps, which is why it has been flagged.
Over the past year, TG53's spread has been volatile, moving from around -4.4 bps in late November 2025 to above 3.8 bps on several occasions in 2026. Even so, the current level is the highest in the twelve-month series, exceeding the previous peaks of about 4.06 bps on 31 July 2026 and 3.86 bps on 3 September 2026.
A higher spread means TG53's yield has risen relative to the yields implied by neighbouring gilts along the curve. In practical terms, the bond is trading cheap relative to the curve, which implies a lower price relative to comparable maturities. The bond is a long-dated green gilt maturing in July 2053, so its pricing is sensitive to long-end moves and to supply and demand conditions specific to this issue. The data alone does not identify the cause, but the scale and suddenness of the move make it a notable outlier for investors monitoring relative value in the long end of the curve.
The TG27 (1¼% Treasury Gilt 2027) spread to the interpolated curve yield stood at -13.18 bps on 2 November 2026. This is unusually low relative to its own history over the preceding 12 months, falling below the lower anomaly threshold of -12.78 bps. The 12-month standard deviation is about 6.0 bps. A negative spread means the bond's yield sits below the yield implied by the interpolated curve at its maturity, so the bond is trading rich relative to neighbouring tenors.
The spread has moved considerably over the recent window. Over the past day, it recovered by about 1.75 bps from -14.93 bps, having been at its lowest level of -16.32 bps on 28 October. Over the past month, it has declined by roughly 9.8 bps from -3.35 bps on 2 October. Over the past year, it has fallen by about 15.5 bps from +2.26 bps on 3 November 2025.
The series has been volatile, with several sharp single-day moves in both directions. The current reading therefore sits near the extreme of its one-year range but is not an isolated outlier. For a holder or analyst, the key implication is that TG27 is pricing materially richer than its curve neighbours, so relative-value comparisons against adjacent gilts should account for this dislocation.