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2025-12-12 17:44:25
[Stunning Yield Curve Movement: Historic Flattening Under Correction] ⑴ Institutional data shows that on Tuesday, the slope of the 10-year and 30-year portions of the UK gilt yield curve appeared unusually flat after a directional adjustment, deviating from its three-month regression trend by approximately 11.8 basis points, equivalent to 3.9 standard deviations. ⑵ This level of deviation is statistically extremely rare. If the regression residuals follow a normal distribution, it means that such a high valuation of 30-year gilts relative to 10-year gilts would only occur once every 74 years. ⑶ However, the market has quickly corrected this extreme pricing. Since Tuesday, the 10s/30s yield curve has steepened by approximately 6 basis points. ⑷ Currently, the flatness of this portion of the curve has narrowed significantly to only about 5.5 basis points, equivalent to 1.7 standard deviations, indicating that the extreme pricing distortion in the market has been significantly alleviated.
