1) Recent Rates Movements
The UK gilts yield curve has shown distinct movements across different time periods:
- Past day: The curve experienced a bull steepening, with the spread change calculation (+8.16bps = -8.65bps - -16.80bps) showing steepening as short-end yields fell more (-16.80bps at 2Y) than long-end yields (-8.65bps at 30Y).
- Past month: A notable steepening move occurred with a spread change of +20.43bps (30Y change of +4.80bps minus 2Y change of -15.63bps), as short-end yields declined while long-end yields increased.
- Past year: A significant steepening trend emerged with a spread change of +102.38bps (30Y change of +57.81bps minus 2Y change of -44.58bps), marked by a substantial rise in long-end yields while short-end yields decreased.
These movements reflect important economic dynamics:
- The consistent steepening across all periods indicates a growing divergence between short and long-term interest rate expectations.
- The decline in short-end yields, particularly visible in the past month, suggests market expectations of near-term monetary policy accommodation.
- The rise in long-end yields over the past year, combined with falling short-end yields, points to increased term premium and longer-term inflation expectations.
2) Trends and Anomalies
Over the past 6 month(s), the volume of TG38 was unusually high, with the latest daily volume on 2025-04-03 of 42,660,789. This value falls outside the expected range (defined as within 3 standard deviations of the mean) based on historical data. The high trading volume for this bond suggests heightened market activity and interest around this particular gilt.
Over the past 2 week(s), the volume of TG32 was on a upward trend, with the latest daily volume on 2025-04-03 of 890,374. The increasing trading volume for this bond suggests increasing market activity and interest around this particular gilt.