Morning PWLB Predictions

Headline

Gilt Yields Rise as 1Y Sees 4bps Spike; PWLB Predictions Reflect Volatility

Gilt Market Analysis

The gilt market has shown notable movements this morning, particularly in the short and long tenors. The 1Y yield increased by 4bps to 3.681%, reflecting ongoing market volatility. In the belly of the curve, the 10Y yield rose by 2bps to 4.497%, while the long end saw the 30Y yield decrease by 2bps to 5.184%. This mixed performance is largely driven by today’s public sector net borrowing figures, which came in at -£11.58bn, better than the forecast of -£15bn, indicating a more stable fiscal position than anticipated. Overall, market sentiment appears to be risk-on as investors react positively to the economic data.

PWLB Reset Predictions

• 1y: predicted 4.60% [+4bp from current]
• 5y: predicted 4.98% [+5bp from current]
• 10y: predicted 5.54% [+6bp from current]
• 20y: predicted 6.09% [+6bp from current]
• 30y: predicted 6.14% [+2bp from current]
• 50y: predicted 5.96% [+8bp from current]

Context

The predictions reflect the recent movements in gilt yields, particularly influenced by the better-than-expected public sector borrowing figures, which have contributed to a more optimistic outlook for fiscal stability.

Calendar Events

Releases So Far Today

• GBP Public Sector Net Borrowing Ex Banks: Actual: -£11.58bn, Forecast: -£15bn, Previous: -£10.94bn (MED impact) - This release is significant as it indicates the government's fiscal health, impacting gilt yields.

Remaining Today

• No further releases scheduled for today.

This Week Ahead

• Tomorrow 00:01: GBP Gfk Consumer Confidence (forecast: -17)
• Tomorrow 07:00: GBP Retail Sales YoY (forecast: 0.8%)
• Tomorrow 07:00: GBP Core Retail Sales (forecast: 0.7%)
• Tomorrow 07:00: GBP Retail Sales MoM (forecast: -0.2%)
• Tomorrow 07:00: GBP Core Retail Sales (forecast: -0.3%)
• Tomorrow 09:30: GBP S&P Global Composite PMI Flash (forecast: 51.7)
• Tomorrow 09:30: GBP S&P Global Services PMI Flash (forecast: 51.5)
• Tomorrow 09:30: GBP S&P Global Manufacturing PMI Flash (forecast: 50.8)
• Tomorrow 09:30: GBP BoE Greene Speech (LOW impact)
• Tuesday 00:01: GBP BRC Shop Price Inflation (forecast: 0.8%)

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.

Wishing you a productive day in treasury management!