1) Recent Rates Movements
The gilts yield curve has exhibited a consistent flattening trend across all observed periods, driven by short-end yields rising faster than long-end yields.
- Past day: The 2Y yield rose by 10.91bps while the 30Y yield increased by only 5.18bps, resulting in a Spread Change of -5.73bps, confirming a flattening move; the 10Y and 20Y tenors also rose moderately, by 6.48bps and 8.01bps respectively.
- Past month: The 2Y yield increased by 12.01bps against a 30Y increase of 11.73bps, producing a Spread Change of -0.28bps, indicating a marginal flattening; intermediate tenors saw the 5Y rise by just 3.73bps while the 20Y climbed 12.98bps.
- Past year: The most pronounced flattening occurred here, with the 2Y yield surging 57.40bps compared to a 33.27bps rise in the 30Y, yielding a Spread Change of -24.13bps; the 5Y and 10Y also rose substantially, by 54.61bps and 48.01bps respectively.
This sustained flattening pattern, most acute over the past year but persisting into the past month and past day, reflects a yield curve environment where short-term rates have adjusted upward more aggressively than long-term rates. Such dynamics are typically associated with monetary policy tightening expectations, as short-end yields are more sensitive to central bank rate decisions, while long-end yields incorporate broader expectations for growth and inflation over an extended horizon. The narrowing spread between the 2Y and 30Y tenors across all three timeframes signals a consistent market repricing of near-term interest rate expectations relative to longer-term economic outlooks, with the trend intensifying when viewed over the longer past year window compared to the more modest moves seen in the past month and past day.