Market insights

Over the past day, gilt yields increased across the curve, with the 30Y rising 2.62bps and the 2Y rising 1.63bps, giving a spread change of +0.99bps — a marginal steepening, as the long end outpaced the short end. Over the past month, the 30Y yield rose 4.99bps while the 2Y yield fell 14.42bps, producing a spread change of +19.41bps, indicating a pronounced steepening as short-term rates declined sharply relative to long-term rates. Over the past year, the 30Y yield increased 20.86bps against a 42.59bps rise in the 2Y yield, resulting in a spread change of -21.73bps, reflecting a clear flattening of the curve as short-term yields rose faster than long-term yields.

• Past day: Spread change +0.99bps, steepening, driven by broadly similar gains across tenors with a slight tilt toward the long end.
• Past month: Spread change +19.41bps, steepening, driven by a notable decline in the 2Y yield alongside a modest rise in the 30Y yield.
• Past year: Spread change -21.73bps, flattening, driven by a larger rise in short-term yields relative to long-term yields.

The short-term steepening observed over the past day and past month contrasts with the flattening trend seen over the past year, highlighting a shift in underlying rate dynamics. The monthly steepening, driven primarily by falling short-term yields, is consistent with near-term monetary easing expectations, as short rates are typically more sensitive to shifts in policy rate outlooks. Conversely, the year-long flattening pattern, characterized by a sharper rise in the 2Y yield relative to the 30Y yield, reflects a period in which short-end yields adjusted more strongly than long-end yields, consistent with a tightening monetary policy stance over that horizon.

• Past day: Minimal steepening signals limited near-term shift in rate expectations.
• Past month: Stronger steepening reflects short-end yield declines, consistent with evolving near-term policy rate expectations.
• Past year: Flattening reflects short-end yields rising faster than long-end yields, consistent with monetary policy tightening dynamics over the period.