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LDI Market Bulletin - October 2023

A comprehensive market update on interest rates, inflation, and bond markets for institutional investors.

14/11/2023
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Read full reportLDI Market Bulletin - October 2023
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Top Headlines

1. Gilt yields jump on UK bond sell-off

On 18th October 2023, gilt yields clocked their biggest daily rise since July 2023, led by a sell-off in UK government bonds. On this day yields on 10-year gilts surged 0.15% to 4.66%, the highest level since August 2023, whilst 2-year yields rose by 0.13% to 5%. This was mirrored in the US, where 10-year treasury yields reached 4.9% on 18th October 2023 - their highest level since 2007. Overall, 10-year gilts rose by 0.12% from end of September to end of October 2023.

2. BoE Chief signals possible rate cuts mid-2024

Huw Pill, the BoE’s Chief Economist, signalled on Monday 6th November 2023 that the central bank would be willing to consider interest rate cuts in the middle of 2024. As a result, gilts rallied sharply the following day, with yields falling to 4.62% - their lowest level since June 2023. Despite this departure from the Bank’s persistent ‘higher for longer’ narrative, Pill added that any changes before summer 2024 were unlikely.

Read full reportLDI Market Bulletin - October 2023
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