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porca misèria

Yield Curve

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Maybe someone who knows about gilts can explain ...

Recently if I look at an overview of gilt prices/yields, it's gone from being ultra-low yields at the short end (which I understand is usual) to rather higher short yields. In fact those with 2009/10 dates are looking rather better than retail fixed-rate bonds. Just a few weeks ago, the shortest gilts were sub-1%!

Is that an artifact of something, or is the market pricing in risk of a default happening within months?

And why are medium and long gilts not moving in line with the shorts?

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Maybe someone who knows about gilts can explain ...

Recently if I look at an overview of gilt prices/yields, it's gone from being ultra-low yields at the short end (which I understand is usual) to rather higher short yields. In fact those with 2009/10 dates are looking rather better than retail fixed-rate bonds. Just a few weeks ago, the shortest gilts were sub-1%!

Is that an artifact of something, or is the market pricing in risk of a default happening within months?

And why are medium and long gilts not moving in line with the shorts?

It's the "bounce" you're noticing. We'll be at peak optimism within the year - that's why short dated bonds yields are rising.

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Maybe someone who knows about gilts can explain ...

Recently if I look at an overview of gilt prices/yields, it's gone from being ultra-low yields at the short end (which I understand is usual) to rather higher short yields. In fact those with 2009/10 dates are looking rather better than retail fixed-rate bonds. Just a few weeks ago, the shortest gilts were sub-1%!

Is that an artifact of something, or is the market pricing in risk of a default happening within months?

And why are medium and long gilts not moving in line with the shorts?

Not sure the Beeb can be considered a reliable source on this one.

Check

http://www.yieldcurve.com/marketyieldcurve.asp

and

http://www.bloomberg.com/markets/rates/uk.html

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