Morning PWLB Predictions

Gilt yields have surged this morning; PWLB rates are set for a marked increase at the next reset.

GILTS SNAPSHOT

• → 1y: 4.464% (+11bp) — Front-end leads, reflecting rate hike expectations.
• → 10y: 4.928% (+7bp) — Belly follows, yields at highest since 2008.
• → 40y: 5.506% (+10bp) — Long end jumps, curve remains steep.

PWLB 12:30 RESET — PREDICTIONS

• → 1y: predicted 5.29% (+8bp from current)
• → 5y: predicted 5.50% (+7bp from current)
• → 10y: predicted 5.92% (+7bp from current)
• → 20y: predicted 6.38% (+3bp from current)
• → 30y: predicted 6.47% (+5bp from current)
• → 50y: predicted 6.23% (+2bp from current)

WHAT'S DRIVING THIS

• → UK borrowing costs and gilt yields are at their highest since 2008, with multiple sources citing inflation shock and energy-driven market stress.
• → Middle East conflict has triggered a surge in oil and gas prices, fuelling expectations of further interest rate hikes.
• → Bank of England is now expected to raise rates at least twice this year, according to major market participants.
• → Public sector net borrowing for February came in at £14.3bn (actual) vs £8.7bn (forecast), well above expectations and adding to upward pressure on yields.

CALENDAR

RELEASES SO FAR TODAY

• → Public Sector Net Borrowing — Actual: £14.3bn vs Forecast: £8.7bn vs Previous: -£31.9bn — (MEDIUM) — Significantly above forecast; signals fiscal pressure and supports higher yields.

STILL DUE TODAY

• → 20:30 — CFTC GBP speculative net positions — Forecast not available — Unlikely to affect the 12:30 reset.

NEXT 48 HOURS

• → Sat 14:30 — USD Fed Chair Powell Speaks — (HIGH)

A turbulent morning for gilts; treasurers should expect a material upward shift at the next PWLB reset.

This commentary is provided for information only and is not financial advice. Please verify rates directly with PWLB or official sources before acting.

Gilt Edge Advisor — If you wanted a quiet Friday, the market had other ideas.