Morning PWLB Predictions

Headline

Gilt Yields Dip as 1Y Sees a 1bp Drop; PWLB Predictions Reflect Volatility

Gilt Market Analysis

The gilt market is experiencing mixed movements this morning, with notable changes across various tenors. The 1Y yield has decreased by 1bp to 3.616%, reflecting a risk-off sentiment following today’s disappointing housing data. In the belly of the curve, the 10Y yield rose by 2bp to 4.510%, indicating some volatility as investors react to economic indicators. Meanwhile, the 30Y yield increased by 3bp to 5.238%, suggesting a cautious outlook as market participants digest the implications of the latest PMI figures.

PWLB Reset Predictions

• 1y: predicted 4.59% (+2bp from current)
• 5y: predicted 5.00% (+3bp from current)
• 10y: predicted 5.57% (+3bp from current)
• 20y: predicted 6.11% (+2bp from current)
• 30y: predicted 6.17% (0bp from current)
• 50y: predicted 5.95% (+3bp from current)

Context

The predictions reflect the recent movements in gilt yields, particularly influenced by today’s Nationwide Housing Prices data, which showed a 0.4% month-on-month decline against a forecast of 0.3%. This, along with the Manufacturing PMI coming in lower than expected, has contributed to a cautious market sentiment.

Calendar Events

Releases So Far Today

• GBP Nationwide Housing Prices YoY: Actual: 0.6%, Forecast: 1.4%, Previous: 1.8% (MED impact) - This matters for gilts as it indicates weakening demand in the housing market.
• GBP Nationwide Housing Prices MoM: Actual: -0.4%, Forecast: 0.3%, Previous: 0.3% (MED impact) - A decline suggests potential economic slowdown, impacting investor sentiment.
• GBP S&P Global Manufacturing PMI Final: Actual: 50.6, Forecast: 51.2, Previous: 50.2 (LOW impact) - While not high impact, it reflects ongoing challenges in the manufacturing sector.

Remaining Today

• No further releases scheduled for today.

This Week Ahead

• Monday 09:30 (2026-01-05): GBP BoE Consumer Credit (Forecast: Previous: 1.12B)
• Monday 09:30 (2026-01-05): GBP Mortgage Approvals (Forecast: Previous: 65.02k)
• Monday 09:30 (2026-01-05): GBP Mortgage Lending (Forecast: Previous: 4.27B)
• Monday 09:30 (2026-01-05): GBP Net Lending to Individuals MoM (Forecast: Previous: 5.40B)
• Monday 09:30 (2026-01-05): GBP M4 Money Supply MoM (Forecast: Previous: -0.00)
• Tuesday 09:30 (2026-01-06): GBP S&P Global Composite PMI Final (Forecast: 52.1)

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.

Stay informed and keep your treasury operations running smoothly!