⚖️🌐G10FX Curves Bear Flattened, Gilts Underperformed: Cable FX Macro
- Rosbel Durán
- 2 hours ago
- 1 min read
Most G10 yield curves experienced bear flattening: short-term yields (1Y/2Y) rose significantly more than long-term yields (10Y/30Y).
UK gilts led the charge with front-end moves of ~+65–72 bps on the 2Y, while the 30Y lagged at ~+32 bps.
Germany saw an even more pronounced version: 2Y up ~+43 bps vs. 30Y only +10 bps.
This pattern reflected markets pricing in near-term inflation spikes from energy costs, while longer-term growth concerns (potential recessionary drag from high oil) capped the back end.
The UK stood out as the most inflation-sensitive large economy in the G10, vulnerable to imported energy costs.
Overall, the last month delivered one of the more differentiated G10 bond moves in recent years — not a uniform sell-off, but a highly country-specific repricing driven by varying exposures to energy costs, fiscal vulnerability, and central bank credibility.
