eyeQ: keep the bond market on your radar
Experts at eyeQ use AI and their own smart machine to analyse macro conditions and generate actionable trading signals. Here’s why there’s no room for complacency.
10th February 2026 10:45
by Huw Roberts from eyeQ
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
iShares Core UK Gilts ETF (IGLT)
Macro Relevance: 54%
Model Value: £9.85
Fair Value Gap: +1.02% premium to model value
Data correct as at 10 February 2026. Please click glossary for explanation of terms. Long-term strategic model.
For now, it looks like the Keir Starmer government remains safe. At least until the May elections.
That means a few months more where investors need to keep an eye on the bond and currency markets. Gilts and sterling will be the pressure points reflecting any market fears about a change of government.
Given any change in personnel among the Labour Party will likely involve a leftward shift, from New Labour to more traditional left-wing policies, that means the risk here is a return to what markets perceive as fiscal irresponsibility - more government spending, less discipline on welfare spending. That implies higher gilt yields and a weaker pound.
iShares Core UK Gilts ETF GBP Dist (LSE:IGLT) is the exchange-traded fund (ETF) that gives investors exposure to the gilt market and is a useful proxy to watch. eyeQ models it, and the simple conclusion, for now at least, is that the outlook is deteriorating but only modestly. There aren’t yet any signs of panic.
Source: eyeQ. Past performance is not a guide to future performance.
This first chart above shows the ETF all the way back to 2022, capturing the dramatic stress courtesy of the Liz Truss mini-Budget. This is not yet that.
Zooming into recent price action below, however, suggests we can’t afford to be too complacent.
Macro conditions are getting slightly worse - eyeQ model value has fallen almost 1% so far in 2026. And the ETF is lagging that deterioration. It sits 1% rich to our £9.85 fair value level. That’s a modest fair value gap but, at the margin, it does suggest there’s a little buffer built in if the political headlines take a further turn for the worse.
All in all, no need for panic. But equity investors need to keep the bond market on their radar.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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