Market insights
Recent rate movements
Using the 30Y-2Y spread, the curve's shape moved differently across the three periods, with the largest change over the past year. Over the past year, the spread change was 41.60 - 95.73 = -54.13bps, a flattening move. The curve flattened over the past month as well, with a spread change of -29.59 - (-3.71) = -25.88bps. The one-day move was very small: a spread change of 1.66 - 0.77 = +0.90bps, a steepening move.
- Past day: Spread change of +0.90bps, a steepening move, as the 30Y rose by 1.66bps and the 2Y by 0.77bps.
- Past month: Spread change of -25.88bps, a flattening move, as the 30Y fell by 29.59bps and the 2Y by 3.71bps.
- Past year: Spread change of -54.13bps, a flattening move, as the 2Y rose by 95.73bps and the 30Y by 41.60bps.
Over the longer horizons, the curve has flattened, so the gap between short-dated and long-dated yields has narrowed. Over the past year, yields rose at every tenor, but the 2Y rose more than the 30Y, which is consistent with higher near-term rates being priced relative to longer-term rates. Over the past month, yields fell across the curve, with the long end falling most, which also narrowed the spread. The past day steepening of +0.90bps is too small to indicate a meaningful change in shape, so the overall trend is one of flattening.
- Past day: Marginal steepening, not a meaningful shift in curve shape.
- Past month: Flattening driven mainly by larger declines at the long end.
- Past year: Flattening driven mainly by larger increases at the short end.
Spread to the fitted curve
The 4¼% Treasury Gilt 2039 (T39) recorded a spread to the interpolated curve yield of 3.51 bps on 2026-11-06. This is the highest reading in the 12-month lookback window and exceeds the upper anomaly threshold of 2.63 bps. The spread measures how far the bond's yield sits from the yield implied by neighbouring points on the curve, so a positive value means T39 is trading cheap relative to adjacent tenors.
The increase has been sharp in the short term. The spread rose by about 1.6 bps from 1.90 bps on 2026-11-05, and it was close to zero on 2026-11-04. Over the past month, the spread has widened by roughly 2.9 bps from about 0.61 bps. Over the past year, it has moved from approximately -0.15 bps to 3.51 bps. Earlier peaks in the window, including 1.71 bps on 2025-12-30 and 1.57 bps on 2026-05-05, were all below the current level.
The reading indicates that T39's yield premium over the interpolated curve has diverged markedly from its own recent history. For investors, this means the bond offers a larger yield pickup relative to its curve neighbours than it has at any point in the past year. The anomaly flag identifies this deviation for further relative-value review.
The 3¾% Treasury Gilt 2038 (TG38) has shown an anomalous drop in its spread to the interpolated curve yield. On 6 November 2026 the spread stood at -1.51 bps, below the lower anomaly threshold of about -0.02 bps. Over the past 12 months, the spread has mostly ranged from roughly 1 to 7 bps, so the current reading is unusually low relative to that history.
The spread was positive for most of the period. It was 4.79 bps on 6 November 2025 and drifted down through 2026, reaching the 1 to 2 bps range by September and October. It then moved sharply: from 1.90 bps on 30 October to 5.58 bps on 4 November, before falling to -2.88 bps on 5 November. It partly recovered to -1.51 bps the following day. The past day change was therefore about +1.37 bps, while the past month change was roughly -3.5 bps and the past year change about -6.3 bps.
A negative spread means TG38's yield sits below the yield interpolated from neighbouring gilts on the curve, so the bond is trading rich relative to the curve. The size and speed of the recent swings, including an 8.5 bp move in a single session, indicate that this relative pricing has been unusually volatile over the last few sessions. Analysts monitoring the gilt curve may want to track whether the spread stays below the threshold or reverts toward its historical range.
The 1¼% Treasury Gilt 2027 (TG27, maturing 22 July 2027) has moved to an unusually low spread against the interpolated gilt curve. On 6 November 2026, its spread stood at -26.55 bps, well below its 12-month threshold of -15.97 bps, which marks it as a low-side anomaly. Over the 12-month lookback, the series has a standard deviation of about 6.94 bps.
Over the past day, the spread fell by about 2.4 bps, from -24.19 bps on 5 November. Over the past month, it declined by roughly 14.4 bps from -12.14 bps on 6 October. Over the past year, it has dropped by about 29.5 bps from +2.99 bps on 6 November 2025, when the bond traded close to the curve. The decline has been progressive, with the spread moving steadily negative since early October 2026, although the daily series has been volatile.
A negative spread means the bond's yield sits below the yield implied by the interpolated curve at its maturity point. Its price is therefore high relative to neighbouring gilts. Because the bond has only about eight months left to maturity, this signals that it is trading rich against the curve in the short end, a position that is statistically unusual over the past year.
The 3¾% Treasury Gilt 2053 (T53, ISIN GB00BPCJD997, maturing 22 October 2053) shows a spread to the interpolated curve yield of 3.32 bps as of 6 November 2026. This exceeds the upper threshold of about 2.93 bps derived from the past 12 months of data, so the reading is flagged as a high anomaly relative to the bond's own recent history.
The spread has been volatile in the latest sessions. It moved from -2.31 bps on 4 November to 3.23 bps on 5 November, a swing of roughly 5.5 bps in a single day, before edging up to 3.32 bps on 6 November. Over the past day, the spread rose by about 0.08 bps. Over the past month, it widened by roughly 3.0 bps from 0.30 bps, and over the past year it increased by about 1.9 bps from 1.39 bps.
A positive spread means T53 is yielding more than the yield implied by the curve interpolated from neighbouring tenors, so it is trading cheap relative to the curve. Although spreads of similar magnitude appeared in late November 2025, peaking at 3.25 bps, the measure generally fluctuated between about -1 and +1 bp through most of 2026. The current level therefore stands out against that range. The data does not indicate whether the elevated spread will persist.