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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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The NZ-UK 10-year yield differential has turned negative, marking the first occurrence since the UK market turbulence in September/October 2022, which coincided with Liz Truss serving as Prime Minister.
- Yesterday, UK interest rates continued their steady ascent, primarily driven by the short end of the yield curve. The 2-year gilt yield experienced an increase of 14bp, while the 10-year rate saw a rise of 8bp.
- Consensus expects another strong UK CPI print (Wed) and a hawkish 25bp hike from the BoE (Thu).
- The recent development in the 10-year yield differential can be attributed to the diverging expected rate paths of the RBNZ and the BoE. The BoE is catching up to the rate hikes that have already been implemented by the RBNZ. Presently, the BoE's official bank rate stands at 4.50% compared to the RBNZ's OCR of 5.50%.
Figure 1: NZ-UK 10-Year Yield Differential
Source: MNI – Market News / Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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