1) Recent Rates Movements
The gilts yield curve has exhibited varying dynamics across different time horizons, with distinct shape changes emerging from the spread between the 30Y and 2Y tenors.
- Past day: The spread change is calculated as (+0.41) - (+1.33) = -0.92bps, indicating a FLATTENING move. The 2Y yield rose by 1.33bps while the 30Y yield increased only marginally by 0.41bps, with the 10Y actually declining slightly by 0.32bps.
- Past month: The spread change is calculated as (+4.72) - (-0.77) = +5.49bps, indicating a STEEPENING move. The 30Y yield increased by 4.72bps while the 2Y yield declined by 0.77bps, with intermediate tenors showing progressively larger increases along the curve.
- Past year: The spread change is calculated as (+33.68) - (+51.18) = -17.50bps, indicating a FLATTENING move. The 2Y yield rose substantially by 51.18bps, outpacing the 30Y yield increase of 33.68bps.
These shape changes carry distinct economic implications. Over the past day, the flattening reflects short-term rate movements outpacing long-term adjustments, a pattern often associated with near-term monetary policy expectations. Over the past month, the steepening move suggests long-term yields rising faster than short-term yields, which can reflect evolving inflation expectations or growth outlooks embedded in longer-dated instruments. Over the past year, the pronounced flattening—driven by a larger increase in the 2Y yield relative to the 30Y yield—is consistent with monetary policy tightening being priced more heavily into the short end of the curve, while longer-term yields have adjusted to a lesser degree.