End of Day Wrap-Up

Headline

Gilt Markets in Turmoil: 10Y Yield Climbs 3bps!

Gilt Market Analysis

The gilt market experienced notable movements today, with the 10Y yield rising by 3bps to 4.524%, reflecting a broader risk-on sentiment in the market. Other significant movements included the 1Y yield, which increased by 3bps to 3.592%, and the 5Y yield, up 2bps to 3.960%. The market's volatility was influenced by today’s GBP Treasury Gilt 2035 Auction, which showed an actual yield of 4.6%, slightly below the previous 4.61%, indicating stable demand for longer-dated securities.

PWLB Reset Predictions

• 1Y: predicted 4.58% (-1bp from current)
• 5Y: predicted 5.00% (0bp from current)
• 10Y: predicted 5.58% (0bp from current)
• 20Y: predicted 6.14% (0bp from current)
• 30Y: predicted 6.25% (+1bp from current)
• 50Y: predicted 6.01% (0bp from current)

Context

The predictions for PWLB rates are primarily driven by the recent movements in the gilt market, particularly the upward pressure on yields across the curve. The auction results today, combined with the overall market sentiment, suggest a cautious outlook as we head into the next economic releases.

Calendar Events

TODAY’S RELEASES:

• GBP Treasury Gilt 2035 Auction - Actual: 4.6%, Previous: 4.61%

This release showed a stable demand for long-term gilts, which influenced today’s gilt movements.

TOMORROW:

• Tomorrow 09:30: GBP DMP 1Y CPI Expectations – Forecast: 3.2%
• Tomorrow 09:30: GBP DMP 3M Output Price Expectations – Forecast: 0.04
• Tomorrow 09:30: GBP S&P Global Composite PMI Final – Forecast: 53.9
• Tomorrow 09:30: GBP S&P Global Services PMI Final – Forecast: 54.3

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

THIS WEEK AHEAD:

• Thursday: GBP New Car Sales YoY – 09:30 – Forecast: 2.0%
• Thursday: GBP S&P Global Construction PMI – 09:30 – Forecast: 42.5
• Thursday: GBP Official Bank Rate – 12:00 – Forecast: 3.8%
• Thursday: GBP MPC Meeting Minutes – 12:00
• Thursday: GBP BoE Monetary Policy Report – 12:00
• Thursday: GBP BoE MPC Vote Unchanged – 12:00

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 rates sharper!