There were three main influences acting on the yield curve this week. There’s the upcoming 30 year bond to be issued early in October and speculation of higher long term yields in Japan and the US as a result of central bank policy decisions. In a globalised market for bonds, the thinking was higher yields in the US and Japan would provide pressure for higher yields here. The local curve had been steepening with all this in mind so when the reality of the Bank of Japan and US Fed policy decisions hit, traders closed positions and the yield curve flattened as rates fell harder at the long end. The 3y/10y spread fell 11bps to 44bps and the 3y/20y spread fell 13bps to 104bps.