Morning PWLB Predictions

Dear Local Authority Treasury Officers,

Market Overview

Headline

Gilt Yields Dip as 30Y Sees Notable Drop; PWLB Predictions Reflect Volatility

Gilt Market Analysis

The gilt market is experiencing a mixed sentiment this morning, with yields showing slight declines across various tenors. The 5Y yield is currently at 3.732%, down 2bps, while the 10Y yield has also decreased by 2bps to 4.298%. In the longer end, the 30Y yield is at 5.100%, reflecting a 2bps drop. These movements are largely driven by recent economic data releases and market reactions to ongoing geopolitical tensions, contributing to a risk-off sentiment.

PWLB Reset Predictions

• 1y: predicted 4.48% (+1bp from current)
• 5y: predicted 4.79% (-1bp from current)
• 10y: predicted 5.38% (-1bp from current)
• 20y: predicted 5.95% (-1bp from current)
• 30y: predicted 6.06% (-1bp from current)
• 50y: predicted 5.84% (-1bp from current)

Context

The predictions reflect the recent movements in gilt yields, influenced by economic data releases and the overall market sentiment. The recent GBP Treasury Gilt 2033 Auction showed an actual yield of 4.1%, slightly lower than the previous 4.3%, indicating a potential easing in borrowing costs.

Calendar Events

Releases So Far Today

• GBP Treasury Gilt 2033 Auction - Actual: 4.1%, Previous: 4.3% - MED impact - Indicates potential easing in borrowing costs for local authorities.

Remaining Today

• No further releases scheduled for today.

This Week Ahead

• Friday 00:01 - GBP Car Production YoY - Forecast: 5.3%
• Friday 00:01 - GBP Gfk Consumer Confidence - Forecast: -16
• Friday 07:00 - GBP Nationwide Housing Prices YoY - Forecast: 1.8%
• Friday 07:00 - GBP Nationwide Housing Prices MoM - Forecast: 0.3%
• Monday 09:30 - GBP Mortgage Lending - Forecast: 4.20B
• Monday 09:30 - GBP S&P Global Manufacturing PMI Final - Forecast: 52
• Monday 09:30 - GBP Net Lending to Individuals MoM - Forecast: 3.80B
• Monday 09:30 - GBP M4 Money Supply MoM - Forecast: -0.00
• Monday 09:30 - GBP BoE Consumer Credit - Forecast: 1.20B
• Monday 09:30 - GBP Mortgage Approvals - Forecast: 65.50k

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 ahead in treasury management!