PWLB briefing
Morning Rate Update
PWLB rates reset lower this morning, with notable declines of 5–6bp across the curve and the 10-year now at 6.01%.
⚠ RATE ALERT — AM reset: PWLB rates fell 3–6bp across all maturities, with the largest moves at 12y, 25y, and 40y. No single news driver, but UK services PMI missed sharply.
PWLB curve drops 5–6bp as UK services PMI slumps
PWLB Snapshot
| Tenor | Rate | Chg |
|---|---|---|
| 1y | 5.14% | -3bp |
| 3y | 5.36% | -3bp |
| 5y | 5.53% | -4bp |
| 10y | 6.01% | -5bp |
| 25y | 6.60% | -6bp |
| 50y | 6.39% | -5bp |
Parallel shift lower of 3–6bp, with the largest moves in the long end.
What Moved
- → Long end leads — 12y, 25y, and 40y maturities dropped 6bp, outpacing the front end.
- → Belly and short end — 1y to 10y tenors fell 3–5bp, with the 10y now at 6.01%.
Context
- → UK S&P Global Services PMI Flash — Actual: 47.9 (Forecast: 51.7, Previous: 52.7). A sharp miss, indicating contraction in the sector.
- → UK S&P Global Manufacturing PMI Flash — Actual: 53.7 (Forecast: 53, Previous: 53.7). In line with expectations, no surprise.
- → News flow — No major new headlines directly impacting gilts or BoE policy this morning.
Calendar Events
Today's Releases
- → UK S&P Global Services PMI Flash — Actual: 47.9 (Forecast: 51.7, Previous: 52.7). Substantially weaker than expected; likely contributed to the downward move in rates.
- → UK S&P Global Manufacturing PMI Flash — Actual: 53.7 (Forecast: 53, Previous: 53.7). In line with forecast, no impact.
Remaining Today
- → 11:00 — CBI Industrial Trends Orders (Forecast: -40)
Next 48 Hours
- → Fri 22 May 07:00: UK Retail Sales MoM — Forecast: -0.60%
⚑ Treasurer's Note — Notable downward shift at the AM reset: 10y PWLB now 6.01%, with long-dated rates down 5–6bp. The move is broad-based, but the long end is leading. The sharp miss in UK services PMI is the main data point, suggesting softer economic momentum. If you are watching for further moves, keep an eye on upcoming UK retail sales and any further PMI fallout.
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 — cutting through the noise since the yield curve had two humps and a prayer.