1) Recent Rates Movements
The UK gilts yield curve has experienced notable movements across different timeframes, with varying directional changes and curve shape dynamics.
- Past day: The spread change of -0.81bps ((-4.08) - (-3.27)) indicates a flattening move, as yields declined across all maturities with long-end rates falling more than short-end rates by approximately 4.08bps versus 3.27bps respectively.
- Past month: A steepening pattern emerged with a spread change of +5.31bps ((-13.71) - (-19.02)), as the curve steepened despite broad-based yield declines, with short-end rates falling more dramatically than long-end rates.
- Past year: The most pronounced steepening occurred over this period, with a spread change of +56.06bps ((5.04) - (-51.01)), reflecting a significant shift from declining short-term yields to rising long-term yields.
These curve movements reflect distinct economic dynamics across timeframes, with the past year's dramatic steepening suggesting evolving market expectations around monetary policy and long-term economic conditions. The transition from short-term rate declines to long-term rate increases typically indicates shifting expectations about future interest rate policy and economic growth prospects. The past month's steepening, despite overall yield declines, suggests that near-term policy easing expectations have intensified more than long-term concerns. Meanwhile, the past day's flattening move indicates a more uniform decline in yields across maturities, potentially reflecting broad-based risk-off sentiment or renewed expectations for monetary accommodation across the entire curve structure.