Square Mile Strat (formerly REIT Strategist)

Gilt geek. UK based investor looking for undervalued opportunities UK stocks. I'm apolitical and only care about what's good for my portfolio.

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

Counterpoint - From 2022, housebuilders have traded as a Gilt yield proxy

Hedge funds have caught on to this, increasing short positioning from the start of the US/Iran war

The durability of this rally depends on Gilt yields more than on the policy

Link to my full write-up 👇

[John Stepek @John_Stepek]

Oh look, it's me talking about the latest edition of help to buy, which reminds me, must get a haircut

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

@ukhpinfo There's a decent chance that a rate hike could bring the 10y Gilt yield lower but could it also help swaps move lower and bring about lower mortgage rates?

https://t.co/qJHpoHfIUk

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

The 10y Gilt yield's response to a rate hike is mixed at best

Today, the 10y Gilt yield to BoE rate spread (term premium) is the highest it's ever been in a hiking cycle

The hike response when pre-hike term premium is > 100bps tends to favour lower yields far more (2 charts 👇)

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

I actually thought of these mathematical theorems as a repository of tools/solutions and that any use for humanity is derived from someone who thinks to stitch various innovations together in a way no one else has thought to before - under that framework, it's a net positive that an LLM churns out more potentially useful mathematical formulae

But your point seems valid too. The journey could very well be just as important to unlocking the insight needed to utilise it. I have no idea what's more important.

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

Fair enough

Although you may get to write about the implications of the problems being solved today when you write the Tuesday, 12th Oct 2106 edition of Money Distilled as an anti-aging treatment has been discovered and today's mathematical discoveries are used in the technological innovations of the day

PS - You're still working because the government has moved the retirement age up to 150 from 57. You're definitely getting a triple-locked state pension that masquerades as a double-locked state pension but they're talking about reforming it again as the OBR estimates that debt to GDP will reach 543% by 2186 if State Pension isn't reformed (widely reposted on X). The WASPID movement (WASPI Descendents) grows more frustrated with talks of further state pension reform.

You are alive to witness all this thanks to the improvements in drug discovery brought about by LLMs

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

The government already seems to be aware of the problems these ideas are looking to solve as seen in the Starmer policy doc leaked a month ago. Almost all of these were listed

So it's just a question of political will I guess?

https://t.co/Xr3ZxiNE3G

[George Eaton @georgeeaton]

10 ideas for a radical Budget – a special @ArguablyMag feature on why Britain needs to do more than play it safe.

Includes @dc_lawrence on taxing autonomous vehicles, @Victoria_Spratt on housing investment, @ryan_wain on making it less expensive to hire young people, @harry_qp on ending QE losses, @jdportes on local work visas and @HelenMiller_IFS on reforming PIP. https://t.co/ompHh0C3dt

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

The 10y Gilt yield's response to a rate hike is mixed at best

Today, the 10y Gilt yield to BoE rate spread (term premium) is the highest it's ever been in a hiking cycle

The hike response when pre-hike term premium is > 100bps tends to favour lower yields far more (2 charts 👇)

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

The 10y Gilt yield's term premium vs the BoE base rate is the highest it's ever been in hiking cycles (ex. 2022 mini-budget which had no useful market signal)

I'm getting more certain that the BoE will hike on Nov 5th

Here's why I think so 🧵

(Chart dated 7th Oct '26)

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

@MarketBlondes @rcolvile The market is arguably already pricing that in but the likelihood of growth being just good enough to suppress debt-to-GDP is a positive development that I think is possible and underpriced

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

Over the past 5 years, nominal GDP growth has outpaced growth in public sector net debt thereby tempering the UK's Debt-to-GDP ratio

The UK's debt sustainability has and continues to be a lot better than anyone will ever admit

It will be interesting to see how this develops...

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

@rcolvile Weaker growth and worsening debt-to-GDP update -

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

Over the past 5 years, nominal GDP growth has outpaced growth in public sector net debt thereby tempering the UK's Debt-to-GDP ratio

The UK's debt sustainability has and continues to be a lot better than anyone will ever admit

It will be interesting to see how this develops...

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

@John_Stepek The moment we were all waiting for 🙃

Let the rally commence

[ʎllǝuuop ʇuǝɹq @donnelly_brent]

Bond bulls rejoice.

This is does not qualify as a signal for Magazine Cover Capital because the cover is in the form of a question, not a directional statement.

But this is pretty damn close to the exact thing bond bulls were hoping for! Funny thing is, @theeconomist also invokes Betteridge’s Law here LOLLLL.

If you are not familiar with the Economist Cover Indicator, google "Magazine Cover Indicator Spectra" and read my full article. It has worked in and out of sample for ~30 years.

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

@ukhpinfo The interesting dynamic that I am gaining conviction on is that a BoE rate hike would serve to bring volatility and IRS levels lower

So a rate hike, given how stretched Gilt yields are today, could counterintuitively bring fixed mortgage rates lower

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

The 10y Gilt yield's term premium vs the BoE base rate is the highest it's ever been in hiking cycles (ex. 2022 mini-budget which had no useful market signal)

I'm getting more certain that the BoE will hike on Nov 5th

Here's why I think so 🧵

(Chart dated 7th Oct '26)

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

I have written what I thought was a well thought out piece on why Gilt yields move lower and this happens 🙃

That's one less thing I have to do I guess

(I'm kidding, I'm still going to post it tomorrow because I've already written it so why not 🤷)

[ʎllǝuuop ʇuǝɹq @donnelly_brent]

Bond bulls rejoice.

This is does not qualify as a signal for Magazine Cover Capital because the cover is in the form of a question, not a directional statement.

But this is pretty damn close to the exact thing bond bulls were hoping for! Funny thing is, @theeconomist also invokes Betteridge’s Law here LOLLLL.

If you are not familiar with the Economist Cover Indicator, google "Magazine Cover Indicator Spectra" and read my full article. It has worked in and out of sample for ~30 years.

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

The market is already pricing in a high probability of a Nov hike

However, I'm actually looking for a reason to take the other side and go long Gilts at these levels and that will follow in a subsequent post

5/end

https://t.co/8Zgvxsr92g

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

The 10y Gilt yield's term premium vs the BoE base rate is the highest it's ever been in hiking cycles (ex. 2022 mini-budget which had no useful market signal)

I'm getting more certain that the BoE will hike on Nov 5th

Here's why I think so 🧵

(Chart dated 7th Oct '26)

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

The rationale detailed by Catherine Mann could easily resonate with at least one of those swing voters who currently don't see second order inflation effects but are concerned they'll arrive if energy prices continue to stay elevated

https://t.co/oeE3S9p16J

4/n

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

@John_Stepek To be fair, fiction struggles to compete with real events these days

[Square Mile Strat (formerly REIT Strategist) @SquareMileStrat]

@John_Stepek I personally have no opinion there unfortunately

Although I'm surprised that real estate wasn't mentioned - for instance Bay Area real estate defied higher mortgages and elevated rates and still rose and performed well

But the answer is always banks (as you mentioned)