1) Recent Rates Movements
The UK gilts yield curve has experienced distinct movements across different time horizons, with varying degrees of steepening observed.
- Past day: The curve steepened by 1.59 bps (30Y +3.61 bps minus 2Y +2.01 bps), with yields rising across all maturities but long-end rates increasing more substantially than short-end rates.
- Past month: A pronounced steepening of 26.30 bps occurred (30Y +29.40 bps minus 2Y +3.11 bps), reflecting significantly higher increases in long-term yields compared to the modest rise in 2-year rates.
- Past year: The most dramatic steepening of 136.39 bps was recorded (30Y +96.65 bps minus 2Y -39.74 bps), driven by a unique combination of falling short-term rates and rising long-term yields.
The consistent steepening pattern across all periods reflects evolving market expectations regarding monetary policy and economic conditions.
- Past day: The modest steepening suggests ongoing differentiation between short and long-term rate expectations, with investors demanding higher compensation for duration risk.
- Past month: The substantial steepening indicates growing concerns about long-term inflation expectations or fiscal sustainability, while short-term rates remained relatively anchored.
- Past year: The extreme steepening, particularly with 2-year yields declining while 30-year yields rose significantly, suggests markets anticipate potential monetary easing in the near term while maintaining concerns about long-term fiscal pressures and inflation risks.
2) Trends and Anomalies
Over the past 2 week(s), the volume of T34 on LSE was on a upward trend, with the latest daily volume on 2025-07-18 of 796,216. The increasing trading volume for this bond suggests increasing market activity and interest around this particular gilt.