1) Recent Rates Movements
The gilts yield curve has shown distinct movements across different time periods:
- Past day: The curve exhibited a slight flattening bias with a spread change of -1.6bps (30Y: -5.4bps minus 2Y: -3.8bps), as yields declined across all tenors with the 10Y sector leading the move lower at -6.5bps.
- Past month: A notable steepening occurred with a spread change of +9.3bps (30Y: +6.8bps minus 2Y: -2.5bps), characterized by declining short-end yields while longer-dated yields increased, with the 20Y sector showing the largest increase of +8.2bps.
- Past year: The curve demonstrated significant steepening with a spread change of +52.8bps (30Y: +55.5bps minus 2Y: +2.7bps), marked by a substantial rise in yields across the curve, particularly pronounced in the belly and long-end sectors.
These movements reflect evolving market conditions:
- The daily flattening suggests short-term defensive positioning, with yields declining uniformly across the curve.
- The monthly steepening indicates growing term premium demands and potentially shifting inflation expectations.
- The yearly steepening, particularly pronounced with yields rising more than 50bps in intermediate to long-term sectors, aligns with the broader trend of monetary policy tightening and increased term premiums.
2) Trends and Anomalies
Over the past 6 month(s), the volume of TN25 was unusually high, with the latest daily volume on 2025-01-21 of 49,013,695. This value falls outside the expected range (defined as within 3 standard deviations of the mean) based on historical data. The high trading volume for this bond suggests heightened market activity and interest around this particular gilt.