1) Recent Rates Movements
The gilts yield curve has exhibited a consistent flattening pattern across all observed periods, with short-term yields rising more sharply than long-term yields.
- Past day: The 2Y yield rose by 15.55bps while the 30Y yield increased by only 2.76bps, producing a Spread Change of -12.79bps, confirming a flattening move.
- Past month: The 2Y yield increased by 33.13bps against a 28.68bps rise in the 30Y yield, resulting in a Spread Change of -4.45bps, indicating a modest flattening.
- Past year: The 2Y yield climbed 67.32bps compared to a 43.30bps increase in the 30Y yield, yielding a Spread Change of -24.02bps, representing the most pronounced flattening across the three periods.
This sustained flattening across the past day, past month, and past year reflects a consistent repricing of short-term interest rate expectations relative to long-term rates. The disproportionate rise in short-end yields is typically associated with monetary policy tightening or expectations thereof, as short-term yields are more sensitive to central bank rate decisions. Meanwhile, the more contained movement at the long end suggests comparatively stable long-term growth and inflation expectations. The acceleration of flattening observed over the past year relative to the past month and past day points to a cumulative adjustment in the front end of the curve, consistent with market participants pricing in higher near-term policy rates while longer-term inflation and growth expectations have remained comparatively anchored.