UK government bond yields moved higher across the curve on Tuesday afternoon, with the most pronounced increases recorded in the shortest maturities.
Short-term paper led the advance: the 1-year gilt yield rose 3.9 basis points to 4.291%. Mid-duration notes gained as well, with the 5-year yield up 4.1 basis points to 4.667% and the 7-year yield climbing 4.3 basis points to 4.859%. On the longer end, the 10-year gilt yield increased 3.8 basis points to 5.136% and the 30-year yield moved up 3.6 basis points to 5.801%.
The difference between the 1-year and 30-year yields - a common way to view the term premium - stood at 151 basis points, essentially unchanged from the 151.3 basis points recorded at the previous close.
Looking at recent trends, yields have shifted notably higher over the past month across the curve. The 3-year gilt yield has risen by 43.7 basis points over that period, while the 30-year yield has climbed 30.8 basis points.
Market breadth outside gilts showed limited movement on the session. The FTSE 100 Index remained largely unchanged through Tuesday trading. In the credit market, UK 5-year credit default swaps tightened by 0.3 basis points, moving to 19.5 basis points.
Performance over the trailing year provides additional context for asset classes: the Bloomberg UK Index of government bonds has posted a 1.1% gain over the past year, while the FTSE 100 Index has advanced 18.7% over the same interval.
Taken together, the session featured a broadly higher gilt yield curve with short-term rates registering the largest uptick, minimal net movement in the main equity benchmark, and a slight tightening in 5-year CDS spreads.
Summary
On Tuesday, yields across UK government bonds rose, especially at the short end. Mid- and long-term yields also increased, the 1-30 year spread was essentially flat, the FTSE 100 was little changed, and 5-year CDS tightened marginally.