End of Day Wrap-Up

Headline

Gilt Yields Rise as 10Y Moves Up 4bps – A Notable Shift!

Gilt Market Analysis

Today, the gilt market experienced notable volatility, particularly in the longer tenors. The 10Y gilt yield rose by 4bps to 4.53%, while the 15Y and 20Y yields also increased by 5bps each, reaching 4.93% and 5.16% respectively. This upward movement can be attributed to today’s economic data releases, particularly the GfK Consumer Confidence which came in better than expected at -17 against a forecast of -18, indicating a slight improvement in consumer sentiment. Overall, market sentiment appears to be risk-on as investors react positively to the data.

PWLB Reset Predictions

• 1Y: predicted 4.74% (9bp from current)
• 5Y: predicted 5.01% (1bp from current)
• 10Y: predicted 5.57% (0bp from current)
• 20Y: predicted 6.12% (0bp from current)
• 30Y: predicted 6.21% (0bp from current)
• 50Y: predicted 5.96% (0bp from current)

Context

The predictions reflect the recent movements in gilt yields, particularly the notable rise in the 10Y yield, which is likely influencing the PWLB rates. The better-than-expected consumer confidence data has contributed to a more optimistic outlook, impacting borrowing costs.

Calendar Events

TODAY’S RELEASES:

• GBP GfK Consumer Confidence - Actual: -17 (Forecast: -18, Previous: -19) - 09:30 release showed a slight improvement in consumer sentiment.
• GBP Retail Sales YoY - Actual: 0.6% (Forecast: 1.4%, Previous: 0.6%) - This release did not meet expectations, indicating ongoing challenges in retail.
• GBP CBI Distributive Trades - Actual: -44 (Forecast: -26, Previous: -32) - This significant miss suggests weaker retail performance.

The GfK Consumer Confidence release was particularly influential in today’s gilt movements, contributing to the risk-on sentiment.

TOMORROW:

• Tomorrow 07:00: GBP Current Account – Forecast: -18.80B
• Tomorrow 07:00: GBP GDP Growth Rate YoY Final – Forecast: 1.3%
• Tomorrow 07:00: GBP GDP Growth Rate QoQ Final – Forecast: 0.1%

These releases may influence tomorrow’s 9:30am PWLB reset.

THIS WEEK AHEAD:

• Monday 22nd: GBP Current Account – 07:00 – Forecast: -18.80B
• Monday 22nd: GBP GDP Growth Rate YoY Final – 07:00 – Forecast: 1.3%
• Monday 22nd: GBP GDP Growth Rate QoQ Final – 07:00 – Forecast: 0.1%

This commentary is provided for informational purposes only and should not be construed as financial advice. Market conditions can change rapidly, and you should always verify current rates directly with the PWLB or through official channels before making borrowing decisions. Past performance is not indicative of future results.

Keep your treasury operations sharp and your borrowing strategies sharper!