PWLB briefing
Morning Rate Update
PWLB rates have surged across the curve at the AM reset, with 10–14bp increases and the 10y now above 6%—a significant repricing driven by global inflation and geopolitical risk.
⚠ VOLATILITY ALERT — PWLB fixed rates jumped 8–14bp at the AM reset, with the 10y up 11bp to 6.07%, as surging oil prices and renewed Middle East tensions stoke global inflation fears.
PWLB rates leap as oil and inflation risks hit gilts—10y tops 6%
PWLB Snapshot
| Tenor | Rate | Chg |
|---|---|---|
| 1y | 5.23% | +14bp |
| 3y | 5.44% | +14bp |
| 5y | 5.61% | +14bp |
| 10y | 6.07% | +11bp |
| 25y | 6.66% | +8bp |
| 50y | 6.47% | +9bp |
Parallel shift higher across the curve, with the largest moves at the short end.
What moved
- → Front-end surge — 1y, 2y, 3y, and 5y tenors all jumped by +14bp, reflecting acute short-term inflation and rate risk.
- → Belly and long end — 10y up +11bp to 6.07%; 25y and 50y up +8bp and +9bp respectively, confirming a broad-based sell-off.
- → Curve shape — Steepening bias, but with all maturities sharply higher.
Context
- → Oil and inflation fears — Brent crude has surged above $85/bbl after renewed US-Iran hostilities and a blockade in the Strait of Hormuz, stoking global inflation concerns.
- → Fed rate hike bets — US rate expectations have shifted higher ahead of today's inflation data and Fed Chair Warsh's testimony, adding to global bond market pressure.
- → UK data — BRC Retail Sales Monitor YoY came in at 1.7% (forecast: 2.9%, previous: 3.4%), a downside surprise, but overshadowed by global macro drivers.
Calendar events
Today's releases
- → BRC Retail Sales Monitor YoY — Actual: 1.70% (Forecast: 2.90%, Previous: 3.40%). Below expectations, but not the main driver of today's gilt moves.
Remaining today
- → 13:30 USD Core Inflation Rate YoY — Forecast: 2.80%
- → 13:30 USD Inflation Rate YoY — Forecast: 3.80%
- → 15:00 USD Fed Chair Warsh Testimony
Next 48 hours
- → Wed 15 Jul 13:30: USD PPI MoM — Forecast: -0.10%
- → Wed 15 Jul 15:00: USD Fed Chair Warsh Testimony
- → Thu 16 Jul 07:00: GBP GDP MoM — Forecast: 0.10%
⚑ Treasurer's Note — This morning's PWLB reset delivered a sharp repricing: 10y is now 6.07% (+11bp), 1y and 5y both up +14bp, and the long end 8–9bp higher. The move is broad-based, with the front end leading as global inflation and oil shock headlines drive gilt yields higher. If you are planning to transact, be aware that the next reset will reflect any further market volatility—especially after today's US inflation data and Fed testimony. This is a material shift: review your pipeline and timing accordingly.
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 — still here when the only thing moving faster than oil is the PWLB reset.