UK 10 year gilts - 16 October 2024

You will come across specific terms in these notes (FLD, VTL, and so on). Rather than explain them each time, you will find definitions here: guidance notes for Hurst cycles terminology.

UK 10 year gilts - falling into an imminent 54 month cycle trough.

This is a big call and any technician should be a little reticent in such circumstances, but on 30 October is the UK Budget and Rachel Reeves, the current Chancellor of the Exchequer, is likely to deliver one that the people of the UK and the market doesn't like. And if that is the case then yields rise. Similarly, if Trump wins a week later, then bonds are bearish and US yields rise, which means global yields rise. In other words, we have event risk for a tailwind for yields higher. What we are saying in this note is that the rise in the UK specifically could be meaningful because at the end of the month we are due a 54 month cycle trough (i.e.a four year cycle is due to bottom).