Market Insights Weekly

UK gilt yields have fallen below 5% following downside surprises in inflation and softer activity data. Markets are now pivoting to focus on upcoming US PCE and Eurozone CPI data for further policy signals.

Key Takeaways

• 1.Lower oil prices and softer UK economic data have driven 10-year gilt yields back below the 5% threshold.
• 2.UK inflation surprised to the downside at 2.8% in April, while labor market indicators suggest easing wage pressures.
• 3.The Federal Reserve is shifting toward a more hawkish stance as inflation remains above target and US labor momentum continues.

Table of Contents

• Softer data and lower oil drag yields lower
• Gilt yields fall following softer UK data
• Lighter data calendar, inflation risks remain key
• Weekly economic calendar
• Market Insights Team

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