End of Day Wrap-Up

Headline

Gilt Markets Take a Dip: 15Y Yield Down 8bps!

Gilt Market Analysis

The gilt market experienced notable volatility today, particularly in the longer tenors. The 15Y yield decreased by 8bps to 4.819%, while the 10Y yield also fell by 6bps to 4.415%. Other significant moves included the 20Y and 30Y yields, both down 7bps. Today's market sentiment leaned towards a risk-off approach, influenced by the GBP S&P Global Construction PMI which came in at 40.1, matching forecasts but indicating ongoing economic challenges.

PWLB Reset Predictions

• 1Y: predicted 4.59% (4bp from current)
• 5Y: predicted 4.90% (0bp from current)
• 10Y: predicted 5.47% (1bp from current)
• 20Y: predicted 6.01% (0bp from current)
• 30Y: predicted 6.11% (0bp from current)
• 50Y: predicted 5.87% (3bp from current)

Context

The predictions reflect the recent movements in gilt yields, particularly the declines observed today, which are likely to influence the PWLB rates. The construction PMI data, while not a significant market mover, contributes to the overall economic outlook that affects borrowing costs.

Calendar Events

TODAY’S RELEASES:

• GBP S&P Global Construction PMI - Actual: 40.1 (Forecast: 40.1, Previous: 39.4)
• GBP Treasury Gilt 2031 Auction - Actual: 4.0% (Previous: 3.8%)

The 40.1 reading in the construction PMI, released at 09:30, confirmed expectations and highlighted ongoing economic challenges, influencing gilt movements today.

TOMORROW:

• Tomorrow 07:00: GBP Halifax House Price Index MoM – Forecast: 0.1%
• Tomorrow 07:00: GBP Halifax House Price Index – Forecast: 1.0%

These releases may influence tomorrow’s 9:30am PWLB reset, particularly the Halifax House Price Index.

THIS WEEK AHEAD:

• Tuesday 00:01 (2026-01-13): GBP BRC Retail Sales Monitor YoY – Forecast: 0.9%
• Tuesday 10:00 (2026-01-13): GBP Index-linked Treasury Gilt 2035 Auction
• Wednesday 10:00 (2026-01-14): GBP Treasury Gilt 2035 Auction

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.

Until next time, keep your treasury operations as smooth as a well-oiled machine!