Steepening of the yield curve accelerated this week. Rates rose along the curve but increases were grew larger the further one went out. The 3y/10y spread rose 9bps to 55bps and the 3y/20y spread rose 18bps to 117bps. This was not Australian market following offshore leads either; longer-dated bond yield rose well in excess of yields offshore. Another reason why the yield curve has steepened has been the announcement of a new Australian 30 year bond. Westpac suggested this steepening could continue as the issue nears. Investors appear to be selling some of the longer dated bonds on the anticipation of buying some of the new benchmark 30 year issue.